Money, Insurance - Army Times

Renter's policies protect against damage, crime

While you may not own a house, you do own a home -- all those furnishings and personal belongings that make up your life's possessions.

Silja Robeson, a staff sergeant in the Air Force, just moved with her husband, Dave, into a rental house in San Antonio. They've rented before, but this is the first time they've chosen to buy renter's insurance.

"The house is covered under a builder's warranty, meaning it's insured from the walls out," Robeson said.

"But the policy doesn't cover our personal property. We wanted a renter's policy because it's a way to protect our assets and the personal belongings that are important to us."

The Robesons face what most renters face -- insurance that covers the shelter around their valuables, not the valuables themselves.

If winds take the roof off, it will get replaced -- but not your couch or your great aunt's armoire that's been following you around for years.

The cost of your policy will depend on factors such as where you live and your deductibles. Standard policies run between $150 and $300 a year, and cover about $35,000 for your possessions and between $100,000 and $300,000 in liability protection from lawsuits. You'll pay more if you're insuring valuable electronics and jewelry.

Families struggling with financial obligations and one paycheck don't necessarily see renter's insurance as a priority. But according to Shelley Austin, GEICO property agency marketing liaison, renter's insurance can offer peace of mind.

"Suppose your bathtub overflows and damages the unit below you, or you might have a guest slip on your wet kitchen floor and need medical attention," Austin said.

"Or your dog bites someone. If the injured person brings a lawsuit against you, you could be protected by your renter's insurance."

Renter's policies cover several areas:

• Damage. Belongings are protected from weather-related damage caused by rain, hail, wind and lightning. Policies can be tailored to include flood, fire and smoke damage.

• Crime. According to Mike Siemienas, media relations specialist at Allstate Insurance Co., a burglary takes place every 10 seconds in the United States, and two out of every three burglaries occur in homes, condos or apartments. The average loss to a renter is close to $1,000. Renter's insurance covers robbery, pickpocket theft, credit card loss, forged checks, even counterfeit money and vandalism.

• Liability. You can be sued for injuries to guests in your home. For example, if you throw a party at your home and serve alcohol, you could become liable should a guest get involved in an alcohol-related accident as a result.

Renter's policies can be customized to your needs. Renters generally have two policy options:

• Actual cash value. These policies cover the cash value of your belongings. If something is stolen or ruined, you receive payment for the cost to replace it, minus the depreciation value.

• Replacement cost value. This coverage is usually more expensive. It pays the amount it would cost to replace the item today. You receive payment only after you have bought a replacement and submitted the receipt, and generally, the policies stipulate a cap on what you can spend.