Insurance: What You May Not Realize


What You May Not Realize

It’s September and many students have returned to college or are headed to college for the first time.  Some will live in dorms and but many will live off campus in apartments or share a house with a friend.

It is an exciting time for college students as they experience life away from Mom and Dad, move into adult roles and begin to make decisions that will affect the rest of their lives.

If you find yourself in this position whether you are the student or parent, read on.

There are many things needed in order to have a successful college experience and one is to be prepared for the unexpected.  An area often over looked: Renter’s Insurance.

Really?  Yes, you may be astonished by the outcome of the following story.

December 31, 2009 we experienced our first rental home fire.  It was New Year’s Eve and our tenant was entertaining friends and family.  A fire broke out in the middle of the house and spread quickly.  Within minutes, the house was engulfed in fire and smoke.

Thankfully, everyone made it out safely but our tenant’s possessions were lost and the house suffered $72,000 in damages related to fire, smoke & water.

The local Fire Marshall and our insurance company’s private investigator both came to the same conclusion: The fire had started in a bedroom, on the bed.  More than likely by a match or cigarette.

Of course our insurance covered all of the damages and we were able to re-build the house and make it a better home.  We were covered.  Our tenant was not.

You may be surprised by what happened to our tenant.

The fault of the fire was due to someone in the house that was careless with a cigarette or match.  Our tenant lost everything they owned and did not have renter’s insurance to cover the replacement costs of their personal possessions.  In addition, the tenant was liable for all damages to the home.  Yes, you read that correctly!  The insurance company successfully sued our tenant for all damages to the house, which totaled: $72,000.00.

Even though an incident that causes property damage is purely accidental, insurance companies “go after” the guilty or negligent party and settle the matter in courts of law.

Of course our tenant did not have $72,000.00, so the amount was attached to them via a judgment and an agreed upon monthly payment was scheduled.  Sadly, this judgment may follow them for the rest of their life, affecting both their credit history and their ability to rent or buy a home, in the future.

What impact could Renter’s Insurance have played in this disaster?

Renter’s Insurance can help in several areas but the two most important are:

1) Covers personal property and replacement due to theft, burglaries, fires, etc…

2) Covers property damage due to personal negligence.

If our tenant had renters insurance at the time of the fire they would have been able to replace all of their personal items lost to the fire and the property damage would have been covered.

Typical policies offer:

  • $20,000 to $30,000 for personal property loss
  • $100,000 liability coverage, for property loss

Prices vary but are affected by credit score and can be purchased for as low as $12 per month.

College years should be a time for learning, growing and building lasting friendships. Make sure the experience is not marred by something that can easily be covered.

Sheila Tidwell

Co-Host of  Connie and Sheila Talk

Sheila Tidwell is a licensed REALTOR® in Tennessee and a Real Estate Investor with over 8 years experience.



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