Here’s the situation: My partner and I have been in our apartment for a few years, and we’ve always had to get renter’s insurance with at least $100k personal liability coverage. Our current policy covers up to $10,600 for personal property, $4k for loss of use, and $100k for liability, and costs us about $170 per year (~$14 per month).
Now, as we renew our lease, the rules have changed. We’re no longer required to get third-party renter’s insurance. Instead, we have to pay a $10 ‘Liability Insurance Waiver’ (LIW) fee that will cover up to $100k for any damages to the apartment, whether it’s caused by natural events or our own mistakes. But it doesn’t include personal property coverage.
We’re trying to decide if we should keep paying for our renter’s insurance and the required LIW fee. It feels like double coverage for liability. But since the LIW doesn’t cover personal property, we’re thinking of dropping our renter’s insurance. We could afford to replace our belongings with our emergency fund, so we’re leaning towards skipping it.
Has anyone else been in this situation? Are we being too stingy by not wanting to pay $14 a month for renter’s insurance?
Even if you think your stuff isn’t super valuable, imagine starting from scratch if there’s a fire. Replacing everything adds up, from your bed to your clothes and kitchenware. That $14 a month seems small compared to the cost of replacing everything.
Scout said:
Most people don’t realize how much their stuff is actually worth. $10k for two people feels really low to me.
We’re pretty minimalistic, and we try to be intentional with our purchases. We added up what we’d really want to replace, and it came to under $10k. But yeah, we could be underestimating, haha.
Wylie said:
It’s not really double coverage. The waiver protects the owner of the property, not you. It doesn’t stop someone else, like a guest, from suing you.
That’s a good point! Our renter’s insurance does have some protection for guests who might get hurt in our place.
We did check with the management, and they said the LIW covers damages to the apartment, whether natural or caused by tenants, up to $100k. I thought part of that was liability, but maybe I’m wrong?
@Noah
I think there’s a misunderstanding. A waiver isn’t the same as insurance. It just means the property owner won’t sue you, but it doesn’t protect you from claims made by guests or others.
Wylie said: @Noah
I think there’s a misunderstanding. A waiver isn’t the same as insurance. It just means the property owner won’t sue you, but it doesn’t protect you from claims made by guests or others.
Oh, got it. That’s something we’ll have to think about more, then.
As an insurance adjuster, I’d say keep your renter’s policy! The waiver leaves you exposed if someone else gets hurt because of something you did. Like if a friend’s kid gets hurt because you didn’t put away a sharp object.
I sell insurance in Canada, and my partner and I rent too. You might be underinsured. It’s not about what your stuff is worth now, but what it costs to replace. Things add up fast—clothes, electronics, furniture… Even at $14 a month, it’s worth it. You might want to inventory your things and see if you need to raise the coverage.
Renter’s insurance is cheap. Unless all you have is an air mattress and a few t-shirts, get full replacement value coverage. You’ll be glad you did if something happens.
Think about the cost of replacing all your clothes, electronics, kitchen stuff, etc. If your whole apartment burned down, would $170 a year seem too much? Our condo once had a leak from the unit above, and even small things like towels and bedding add up fast.
I can promise you that a ‘liability waiver’ isn’t the same as actual liability insurance. It covers certain acts towards the building owner, but that’s about it.
We are thinking of discontinuing our renter’s insurance because if there was damage to our apartment, the LIW would cover it.
Sounds like the apartment owner just passed their costs onto tenants. If you cause damage, the insurance company can still come after you. Imagine causing a fire and damaging your unit and your neighbors’. You’d be responsible for all that. $14 a month is a small price to pay to avoid that.
Insurance is always a bet. Companies know that on average, they make money because most places don’t burn down. So ask yourself: can you afford to replace everything if you lose it all? If yes, maybe you don’t need insurance. But if you’re unsure, it’s probably worth it. The waiver might not cover everything you think it does.