Last week, a consumer contacted me through my web site. Apparently a condo his friend was renting had water service temporarily shut off. She discovered this when she turned on a tap and nothing came out. Before water service was restored, the friend left for the day, forgetting to turn the tap off.

To make a long story short, water damaged the condo unit where she resided and the one next door. The condo policy on the unit she was renting covered damage to that unit, but refused to respond to the $17,000 property damage subrogation claim of the insurer of the condo next door.

The consumer that contacted me was asking what his friend should do since she had no renters insurance or, being unemployed, financial assets to pay $17,000. Was the insurer bluffing? Should she wait until a lawsuit was filed? My response was to tell him that I could comment about insurance coverage but, being that there was none, this was now a legal question and she should get advice from an attorney.

I present this blog post simply to stress how important renters insurance is, not so much for protecting your own property, but rather limiting your liability exposure for damage or injury to others.

Years ago, when I lived in a large apartment complex, a tenant’s unattended charcoal grill caused a fire that burned a 12- or 16-unit apartment building to the ground. The building and the tenants’ property were a total loss. Fortunately, no one was injured. According to news accounts, not a single tenant, including the person responsible for the fire, had renters insurance.

I’ve often said that a renter in a situation like this probably has a greater need for an umbrella policy than most homeowners because of this type of property and bodily injury exposure.

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Bill Wilson

Founder at InsuranceCommentary.com
One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information

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