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Insurance agent\u2019s sell renters insurance based on cost. It\u2019s easier that way, as the cost for renter’s coverage is insignificant when packaged with an existing auto\u00a0policy.<\/p>\n
But cost is not the real story. Property coverages are great, but the exposure that concerns me the most is liability.<\/p>\n
Let\u2019s say you have $25,000 worth of personal property. If you get a renters policy and it\u2019s covered, great. If you have fire and all the property is lost your renters\u00a0policy will pay. If you don\u2019t then you lose $25,000. With or without a renter\u2019s policy you know what your exposure is.<\/p>\n
But what will happen you invite your neighbor over for coffee\u2026.. We all know the McDonald\u2019s coffee story. If you don\u2019t have a\u00a0![\"\"](\"https:\/\/www.insuringky.com\/blog\/wp-content\/uploads\/2018\/04\/turtle-bite.jpg\")
renter\u2019s policy, you will be the one on the hook. With a renter\u2019s policy, your exposure should be covered or at least significantly mitigated.<\/p>\n
Will attorney\u2019s fees be covered in the event of a frivolous lawsuit?\u00a0 Most likely!<\/p>\n
The bottom-line is simple. When we know the cost of a potential loss, we can better evaluate the risk-reward. Liability exposures are much more difficult to evaluate and there is no reasonable way to discern the value of an insurance policy. We live in one of the most litigious countries in the world.\u00a0 Don\u2019t underestimate the value of the renter’s liability coverage. More importantly, don\u2019t pass on a renter\u2019s policy based on the fact that you are willing to underwrite your own property risk. By doing that you are underwriting your liability exposure too.<\/p>\n