Padzilla Blog: Tenant Tips for Living Large and More

Tenant Tip #12 – One More Insurance Tip…

You may recall I mentioned the value of renter’s insurance last time. Here’s one related thought.

Bet you own a car. Okay. Check your insurance policy. There are two parts to review and consider: liability coverage and uninsured motorist (so-called “UM”) coverage. Many of accident victims I see in my law office lack sufficient uninsured motorist coverage.

Does it matter… Yes, you bet and here’s why!

You need basic minimum liability coverage, at least equal to the state minimum, and more than that if your assets exceed the state limit. BUT REMEMBER, LIABILITY COVERAGE PAYS SOMEONE YOU HIT AND INJURE.

My experience, however, has been you are more likely to get hit by an uninsured driver than to cause an accident yourself. So, while it’s important to insure drivers against your negligence, it’s more important to protect yourself against everyone else.

IT’S THE UNINSURED MOTORIST PART OF YOUR POLICY THAT PAYS YOU IF YOU GET HIT AND HURT!!!!!

So, while its good to focus on liability coverage, it’s the UM coverage that will protect you and your assets and family!

Also, take a look at the so-called “MED PAY” portion of your auto accident. It will pay your medical bills if you get hurt in a car accident. You can double or triple that coverage for peanuts.

Remember, you need to carry minimum liability insurance. And, you should carry enough to protect your assets, but never forget that UM coverage is the part of the policy that protects YOU. PAY and PROTECT YOURSELF FIRST!

Tim Murphy
Padzilla.Com

Not having adequate insurance is like gambling. You might be OK, but you might lose… BIG TIME.

Try this test – add up the cost you to replace the following: Your HDTV, your stereo, your computer, your laptop, your mobile phone and your CDs/DVD’s… you know, the stuff you really value.

Add it up… is it over $2500? Bet it is… Well, have you got that kind of spare cash lying around? What about replacing your furniture, clothes, dishes, bath and bedroom stuff, bet that’s another $2500 at least.

So, who pays for that stuff if there is a fire at your building… happens while you are traveling, or at work. FYI, the Landlord’s insurance will not usually cover your personal effects.

Remember the big ice storm last December… suppose the pipes freeze and burst in your building. You get major flood damage. Can’t call the government… even if they failed to predict the big storm! Owner’s policy wont pay for your stuff… what do you do?

Oh, you pay out of your own pocket!

That’s the thing about risk and insurance… you and I simply cannot predict events in life. Despite precautions fires happen, despite weather predictions, floods and ice storms happen. We all know bad events happen, and happen without warning.

Purchasing insurance shifts risk of such events onto the insurer for the price of the premium. If you can afford the loss of your property, then the gamble may be worth taking. BUT, if you cannot afford to replace your stuff, renter’s insurance is a relatively low cost way to shift the risk off your plate and protect your assets.

Think about it this way. Your assets are part of your total wealth. The building you live in is part of the owner’s total wealth. The owner insures the building in case of flood and fire. So, they are insuring their wealth, paying over some cash to shift risk and protect their wealth. Shouldn’t you do the same thing? Isn’t your wealth as important to you as any property owner?

Tim Murphy
Padzilla.Com

I recall a lawsuit filed over injuries which occurred at an apartment in Portland. Basically, a small child was leaning against a window screen of a second or third floor apartment. Well, as you can guess, the screen let go, and the child fell out the window and was severely injured. You may recall singer-songwriter Eric Clapton’s son was killed some years ago in a similar freak accident after he fell out the window of an apartment in New York City.

You would think the apartment owner would be automatically liable, but that the Portland, Maine case went to suit is proof that first impressions are easily mistaken. In some circumstances, the tenant controls the mechanism of injury. In those cases, the Court may find the tenant responsible for their own injuries.

In the Portland case, the mechanism of injury was the window and window screen, and the Court had to determine who “controlled” the window. Who was responsible for its upkeep, its usage? In other words, it was not clear if the Owner or the Tenant controlled the window.

DO NOT ASSUME YOUR OWNER WILL ALWAYS BE LIABLE. In some cases, the tenant can be liable for any injuries which happen because the tenant controls the mechanism of injury.

To avoid problems, it’s always best to be on guard as to safety issues. Your guests are assuming you keep the unit safe. But, have you made it so? Have you identified and tried to eliminate potential causes of injury, such as bad wiring, loose fittings, broken glass, etc?

Also, do not assume a needed repair is the Owner’s responsibility. It’s best to ask. Take the pre-emptive step of checking before something bad happens.

LAST BIT OF ADVICE: Always document requests made to an Owner to repair anything in the apartment you feel is broken. The best defense you can have is that you noticed the owner, you asked for help… document those requests, and keep copies!

Tim Murphy
Padzilla.Com