The Importance Of Renters Insurance Cannot Be Overstated

March 3, 2010

As I stood behind the police barricades staring at the fire flaming through the windows of the apartment building a block away, I couldn't believe this was really my life. Was I actually standing in the middle of the street at 2:00 a.m. looking at my investment burning up in flames?

As a building owner of a five-unit building, I had never prepared myself for such a possibility. Yes, I had building insurance. And, yes, I had talked to my tenants about renters insurance. But in the back of my mind it never occurred to me this was something I would have to experience.

As the fire burned through the night, I realized the building was going to be a complete loss. The fire had started quickly, engulfing the building within 30 minutes and burning for more than 12 hours. I would learn later that it was an electrical fire that started with faulty wiring in the second-floor ceiling.

My first concern had been the physical well-being of all of the tenants. Two tenants were home at the time the fire started. There was huge relief in knowing that no one had been injured or had suffered from smoke inhalation. The fact that the fire started in the early evening was a blessing. The outcome could have been much different if the fire had occurred in the middle of the night or in the early morning hours when everyone was asleep.

As my relief faded that everyone was indeed safe, my concern turned toward the belongings of my tenants. I knew each by name but not on a personal basis. I had always made it a point to give my tenants their complete privacy, not interfering on a day-to-day basis. I did, however, know their situations -- the single mother with a baby, the single dad caring for his children on the weekends, the elderly man, and two commercial tenants (one of whom had just purchased an entire truckload of inventory, delivered just that day).

My building insurance did cover some expenses eventually, but it had to be used for mandatory expenses such as permits, building demolition and removal, and bills from surrounding fire departments who had responded to the blaze.

In the end, only two of the tenants had renters insurance to cover the cost of their belongings. Three families were left with absolutely nothing and were required to restart their lives afresh. Had these families balanced the small cost of renters insurance with the loss of everything they owned, they most certainly would have realized the necessity of such a policy.

Today I own a different apartment building. Added to my lease now is a complete paragraph about the importance of renters insurance and how owner's insurance covers only the building and renters insurance covers the inside belongings. The importance of renters insurance cannot be overstated. I hope I never again have to see a lifetime of hard work and memories disintegrate in a cloud of smoke.

-Starla from Ohio

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