Conscious of replacement costs after a theft or catastrophe, nearly 50 percent of today’s tenants have renter’s insurance

When Rebekah Dawson opened her Phoenix home to some down-on-their-luck teens, she figured she was doing a good deed. What she didn’t figure on was losing some $2,400 in personal belongings to the boys.

"After they’d been here for awhile, I found out they had a drug problem so I kicked them out," said Dawson. "Right after I kicked them out, I came home and they’d basically cleaned us out … almost $2,400 worth."

Dawson, 43, a single mother with two teens of her own, didn’t have the money to simply dig into her pockets and replace the video games, DVDs, electronics, luggage and jewelry she’d lost.

But because she had renter’s insurance, she didn’t have to anyway. Her $10.75-a-month policy paid $1,800 for her belongings, their value less the policy’s $500 deductible.

As recently as five years ago, just one in four renters invested in such protection, according to the Insurance Research Council. But by 2003, according to estimates from the Independent Insurance Agents and Brokers of America, nearly half of all renters had insurance on their belongings.

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A close relative to homeowner’s coverage, renter’s insurance protects in two ways. The primary mission is to insure you and your belongings from theft or damage. Secondly, you’re sheltered from liability or lawsuits for problems you cause.

It’s that second category that really has the potential to complicate a renter’s life, said Medford Farmers Insurance agent Ed Chun.

"People can get by with having to buy new pajamas and stuff if they have to," said Chun.

"But let’s say somebody sues you and you have a $100,000 liability claim made against you. Or let’s say the house you’re renting burns down. You’ve lost your stuff and, more than likely, the landlord’s insurance company is going to come after the tenant."

Property amounts covered by renter policies are minuscule compared to homeowner’s insurance. Typical coverage is $20,000 to $30,000 worth of loss or damage, plus $300,000 in liability coverage. The cost: about $12 per month. Polices can start as low as $15,000 in property value.

"Most people are surprised at how inexpensive it is," said Lyle McCaw, an agent for American Family Insurance in Medford.

And too many renters, he said, seem to think they have too little to cover or that the landlord will cover their possessions in case of a fire or theft.

"If personal possessions are damaged, destroyed or stolen, it is up to the renter to cover the loss," said McCaw.

"Our trainers used to tell us, if you took your house and tipped it upside down and shook it, everything that fell out it is your personal property — property that you would be responsible for replacing if something were to happen."

The policies also cover injuries to guests at the renter’s home, no matter whether someone falls down a staircase, trips in the yard or is bitten by the normally friendly pet dog. If an accident or fire displaces the renter from the rental, the policy covers the cost of temporary housing.

How much insurance is necessary? Chun tells prospective clients to make a list of belongings and consider their replacement value.

"The minimum I usually write is $25,000," he said, "but I also have clients who have $200,000 in coverage."

Renter’s insurance policies can be purchased to provide coverage for either cash value, which replaces an item’s value less depreciation, or replacement cost, which costs 10 percent more but covers the cost of buying a similar item today.

The best policies offer full replacement value, said Kevin Loyet of The Dana Company, a property insurer. He noted that as some items plunge in retail price, notably computers and big-screen TVs, the replacement cost will be below what was originally paid for the product.

He also suggested renters check the fine print of policies they consider.

Most policies limit coverage such as $1,000 on cash, $5,000 on securities and $2,500 for firearms. "Mysterious disappearance" such as the loss of a ring or a gemstone may also not be reimbursed.

Renters who own particularly valuable items can "schedule" them separately within their policies. Additional jewelry coverage, for example, is $8.50 annually per $1,000 in value.

Be prepared to prove ownership of items stolen, damaged or lost.

"Insurance companies will only pay what you can document," said Loyet.

Thus, a videotape record or item-by-item audit of personal property is a must. While the big items are easily tabulated, it’s all the small items that elude the renter’s memory. Loyet estimates at least 30 percent of plates and saucers, photo frames and other assorted knickknacks are routinely overlooked.

If you are victimized by theft or damage, file a police report at the same time you contact your agent. This is where the paper trail and scheduling of personal property comes in handy: Some insurers will pay documented claims in 10 days or less.

Buffy Pollock is a free-lance writer living in Medford. E-mail her at buffypollock@juno.com. The Associated Press also contributed to this story.