Padzilla Blog: Tenant Tips for Living Large and More

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

This entry was posted on Tuesday, November 10th, 2009 at 4:15 pm and is filed under Tenant Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.