[Welcome readers of REDDIT! I got tagged on Sunday.]
My heart goes out to Southern California and the victims of the wildfires in and around San Diego. A very dear friend of mine lost his former monastery home to the fires. He doesn’t live there any more, but many of my friends have visited there and they lost a small flock of milk goats and some other livestock to the fire. It makes me very sad to hear how many animals they lost.
If you are interested, Nick is hosting a challenge for the American Red Cross. He’s matching donations, so please take him up on it. I myself will be making a donation as my company is matching donations to the American Red Cross as well. Our San Diego office was closed for almost a week, but thankfully no one working for us lost their homes.
Now, onto the title of this post. I know two people who have lost everything to a fire and let these stories be a cautionary tale for you.
Story #1:
My high school Latin teacher went back to Berkeley to finish her PhD. In 1991, there was a major wildfire in the hills of Oakland where she lived. (Oakland is just south of Berkeley and the rents are often cheaper there.) Many years later, I had a chance to see my former teacher again and speak to her about her experience. It still made her verklempt. She lost everything except the clothes on her back, her car, and her dissertation on diskettes. Her cat, her books, everything. Gone. She was on the verge of tears telling me this. I believe from things she said, that she got a FEMA payment, but no renter’s insurance.
Story #2:
Former co-worker of mine goes out for St. Patrick’s Day. He gets sloshed and stays overnight at his girlfriend’s house. He returns the next morning to find the fire department cordoning off his house. They are finishing up putting out a fire there. It’s burned to the ground. His roommates are thankfully alive. My co-worker has fire insurance but his roommates do not. My co-worker is able to document the fancy schmancy suits he wore to his old firm and get replacement cost for them. He’s got enough money to buy himself a condo and marry that girlfriend.
Many times on NPR last week, I heard how the renters lost everything and didn’t have insurance. I am surprised because it costs so little most of the time. Insuring my condo costs me less than $250 a year because I don’t have exceptional riders or additional umbrella policies. (Check that net worth. It’s not worth it yet.)
Please, as the winter season starts, please look into getting renter’s insurance if you do not have it already. This is especially a concern if you are using a kerosene heater.
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Maps,
You sort of have to look at it through a cost benefit analysis and determine the likelihood something will happen. If someone lives in a mud sliding, fire prone, dry area like Southern California, or in a below sea level, hurricane prone area like New Orleans, of course they need to be properly covered plus more.
But if you live in a place like DC with electric/gas heating where there are no natural disasters, it might be overkill to load up on insurance. Might be a waste..
Just my take.
-Raymond
Oh I hear ya. I just signed up for renters insurance myself through allstate. I’m paying $125 per YEAR (about $10 per month) to insure my belongings for $35,000 in case of a fire, theft, or accidental flooding (like a burst pipe). This puts my mind so much at ease, especially since I’m away from my apartment sometimes weeks or a month at a time, traveling for work. I’ve also started a home inventory at stuffsafe.com, and until that is done in detail, I do have pictures of every room, from every angle, in my apartment, including dishes in the cupboard and my bathroom shelves lined with cosmetics and hair products, probably totaling $1000 alone.
Another thing I like about my insurance policy is that if I’m found to be responsible for damages done to another apartment, like if I leave my stove on and start a fire that spreads to another apartment, it’ll cover up to $100,000 of liability damages.
However, the one thing that still distresses me is that I’m not covered from weather-related floods. I live in a basement unit, and insurance companies will only provide weather-related flood insurance if you live within 1000 feet of a body of water.
I am so happy to have renters’ insurance. My emergency fund is only about $1000. What good would that do if my apartment burned up?
One thing I haven’t done, though, is document my belongings and put that in a safe place, like my parents’ house. We should all be like your friend who had proof of what he owned.
Raymond – That first fire story was in Arlington, VA. You’re right natural disaster insurance vs. plain old fire insurance are very different things. But every renter should have renter’s insurance to cover themselves. It’s not ‘loading up’ on excess insurance. It’s actually extremely cheap. I would be surprised if it adds more than $20 a month to the cost of rent.
Sure you could say my chances of X happening is very small. But if it did happen to you, how much would it suck not to have the insurance? That’s what it’s for and you pay for it accordingly.
DebtyBetty – I keep meaning to send my special papers to my parents’ safe deposit box, but I keep forgetting to do it. You’re a good brownie for doing the documentation.
However, you should ask if there is a special rider you can buy for flood insurance. Or move out of the basement, GIMP! LOL!
Sistah Ant – He had to find comparable suits and pull prices off the Macy’s website. Documentation doesn’t always mean saving your receipts, though that will help. I think he had to request his credit card statements so he could see what was purchased. Not entirely sure about that.
Yes, and make sure when you get renters insurance that you get the type that will refund you the FULL value of your belongings. I can’t remember the precise terminology, but one will give you the full value of what you paid, and other type will give you the value minus depreciation. So that means that you may only get $200 for that $500 tv that you paid for. That type of renters insurance is slightly cheaper, but what good will it do you to have $200 to replace your $500 tv? Get the type that will give you the value of your full purchasing price.
I agree, it’s not about how likely something is to happen, it’s about how likely it is and the impact that will have. General contents insurance is a great thing to have.
Thanks for the reminder. It was on my to-do list but I kind of forgot it. Should get on that!
My renter’s insurance is also around $120/year. The price is definitely worthwhile to me.
Renters insurance can make it easier to get insurance if you purchase a property in a hard to insure area – which most areas are becoming– especially if you don’t make claims. House purchases came to a halt in the SF bay area at one point, except for people who already had a renters or home owners policy. Although a new property needed a new policy, it was possible to get that through.
One coworker who lost his house in the Oakland hills fire, drove off in his pajamas with his wallet. His house was one of the first to burn. He waited for stores to open to buy clothes. Knowing he had to start from zero, it was interesting to watch what he bought- a big fancy briefcase and lots of fancy pens and mechanical pencils. He lacked the practicality gene and never did really recover. He was well insured, but not secure of mind sufficiently to make a recovery plan and work on it.
I lived in Atlanta and my apartment along with 6 other apartments caught fire (did you see the new with the fireman rescuing the construction worker off the crane in ‘99? that was my house that burned across the street from the cotton mill they were remodeling into lofts). It was devastating-2 people lost everything- even beloved pets. I was luckier, but I still lost a lot. And no renters insurance. The good thing was that the wonderful people in the area contributed to a fund which helped me buy/replace everything I lost (god bless them) and the insurance company of the construction company who caused the fire also compensated for some of the loss. But if this was just a random fire, we’d have all been screwed-we were all homeless. Thank god for friends with couches and animal crates! After that, I got renter’s insurance….
Amen. You can get a decent policy for $10-$20 a month, yet so many people don’t have renter’s insurance. It’s really sad…
Renter’s insurance is amazing and like you mentioned, it barely costs anything especially if you have a place filled with expensive goods.
A lot of people in my opinion just have that mindset that “it won’t happen to me” and when it does, THEN they take action and get their insurance.
And I got it!
Renter’s insurance is a bargain when you think about what it covers in a catastrophe. We had it all the while when we lived in Boston and we had peace of mind. I hope this helps other people see the benefits and leads them to get the coverage they need.
Jerry
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