Las Vegas renters need protection, too

Trailing behind fire trucks, sirens blazing, on the way home from a quick errand made Tonya Harvey pause and think what bad luck some of her neighbors were having. Seeing the smoke made it real. Seeing her roommates and her cat dangling over the balcony brought it home.

"It's my apartment," she said.

The trouble of a kitchen incident gone awry, about $10,000 in damages and relocation to a nearby apartment were made more bearable with the renter's insurance Harvey's State Farm agent had convinced her to purchase in addition to her auto policy when she was 19. Full disclosure: Havey is a freelance photographer for the Las Vegas Review-Journal's weekend real estate sections.

For an average of $10 a month for a basic policy, "a renter's policy can cover you against many hazards including fire, smoke, lightning, theft, vandalism, windstorm or water overflow," said R. Ty Wilkerson, an agent with American National Insurance.

A landlord's homeowner's insurance policy typically insures the building itself and covers some liabilities, but does not cover a tenant's contents. Which means that when the roof leaks and ruins the television and the floor underneath it, the homeowner's policy only covers the floor, not the television.

The simple solution is renter's insurance. With a typical deductible of $500 to $1,000, possessions can be covered in addition to liability coverage and payment of temporary living expenses if a rental home is unlivable.

Renter's policies will even cover food in the refrigerator that spoils when the refrigerator breaks (after the deductible has been met), which is great news for Costco shoppers who buy meat in bulk and freeze it.

Despite the relative affordability of renter's insurance, only 37 percent of renters nationwide have it, according to a 2014 poll by the Insurance Information Institute.

"My advice is better safe than sorry," said Harvey, who had asked her roommates to watch the fish she was frying on the stove as she ran to the store for another ingredient. "Although (the fire) was basically my fault and could have easily been avoided, some situations are out of our control."

To determine how much coverage is needed, start with a home inventory of all possessions. Track furniture, clothes, electronics, appliances, kitchen gadgets and artwork to complete a list. The Insurance Information Institute recommends Knowyourstuff.org as a guide to logging your belongings, room by room. It never hurts to take pictures, note serial numbers and log unique identifiers in the event of a theft to provide to law enforcement.

There are two main types of renter's policies. An actual cash value policy will pay out the amount of money your items are worth today, after depreciation. A replacement cost policy will pay out the amount of money it would cost to replace an item, despite its depreciation.

"The price of replacement cost coverage is about 10 percent more, but can be well worth the extra expense as the value of most items tends to depreciate quickly," the Insurance Information Institute, www.iii.org, said.

"I recommend anyone who rents a home or apartment to have renter's insurance," Wilkerson said. "The building itself needs to be covered by the landlord. The landlord could be held personally responsible if issues arise at the property."

Basic renter's policies also include liability coverage. The standard is $100,000 according to Insurance Information Institute, and it covers the cost of lawsuits against the tenant. The policies will typically cover all court-related costs, up to the policy threshold for injury or damage caused by anyone living in the home, including pets. So, if your dog bites a neighbor, this is the part of the renter's insurance that would pay, which is also why some insurances will exclude coverage, or increase premiums, of some breeds.

In addition to liability coverage, no-fault coverage of about $1,000 usually covers injuries that occur inside your home to someone who is not a resident. This means, for example, a houseguest slips on a wet floor and breaks a leg. This is the part of the policy that would pay out in that circumstance.

And, if the worst occurs, the insurance covers temporary living expenses, like the cost of a hotel, temporary rentals and meals.

"Some companies provide coverage for a set amount of time, while others have a financial cap," the Insurance Information Institute website said.

If all of that is too complex, remember this simple tip: Renter's insurance can be free.

The secret is to purchase it from the same company from which you already purchase auto, life or other insurance. The multipolicy discount is often near equal to the actual cost of the renter's insurance, which makes the coverage free or nearly free (depending on the amount of coverage necessary).

Other discounts might also be available. Be sure to mention if the property has a security system, smoke detectors, carbon monoxide detectors, deadbolts and if you are older than 55.

"I have a friend whose water heater burst and caused a ton of damage in her garage," Harvey said. "Another had mold because the washer was not draining properly and built up water in the wall. Renter's and homeowner's insurance is money well spent."