Renter's Insurance: Explained.

[everything you need to know about renter's insurance in NYC and thensome.]

Admit it, you know it has been on your perpetual to-do list for some time now -- it certainly has been for me. The culmination of finally admitting I'mNotInCollegeModeAnymoreToto, witnessing friends' coverage nuances for lost/stolen laptops, getting a new computer/iPhone/bigasstv/furniture in my own apt, and toppling cranes around the city (there's a shitton of construction going on practically across the street from me) all seemed like good enough reasons to get off my ass and pull my act together. (That, and I had a bit of extra time on my hands to justify the time spent.) Turns out it wasn't that hard (just time consuming) and even more exciting: it was cheap! $25,000 in personal property coverage with a $500 deductible only runs about $150 a year in my case. You can get a more-than-reasonable amount of coverage for as little as $125 to $175 a year. Since I know a lot of my friends have been waiting for me to settle and sort all the details so they can follow suit, I've got plenty to share.

It actually all started with electronics. The Boif found a reputable company (albeit with a crappy website) that will insure his laptop and peripherals at an astoundingly cheap price -- covering even accidental damage. I, however, have a Mac Mini connected to a bigass flatscreen tv that I use as my media/entertainment hub (I swear I'll write about my swanky setup soon) and I wanted both of these electronics covered, in addition to my iPhone, which AT&T refuses to offer any sort of comprehensive coverage. Going around in circles with SafeWare's administrators and underwriting department, they refused to recognize my TV as a "computer monitor" (what? that's what I'm using it for, technically) and didn't want to classify the iPhone as a PDA or personal computer, so I eventually gave up on them. I really wanted both computer and tv covered, as they'd represent the bulk of my electronic loss, and my previous $600 iPhone just seemed like a ticking time bomb begging to be dropped in the toilet or a jack and coke or something. I moved away from electronics-based insurance, and on to Renter's insurance, which I had heard has a much more comprehensive umbrella. As any Google-centric, resourceful individual might do, I started my research in the middle of the night with some random searches and generic quotes. (Start here, here, and here to familiarize yourself with the basics.) I tried all the big names and both price and coverage ended up narrowing it down to Allstate and finally State Farm Insurance, whom I settled on.

The Basics.
If you flipped through the articles above, you've probably already figured out that there are two basic types of renter's insurance payout: actual cash value (your $500 couch is probably only worth $200 now) vs. replacement value (even though your couch is only worth $200, it'll still cost you $500 to buy a new comparable one). I didn't come across any quotes offering 'actual cash value' (crappy), so you probably don't need to worry -- but you definitely want the latter. There are also two major types of coverage: all-risk and named peril, which I went with (the most popular/affordable type, covering nearly all likely NYC apt loss events, since flooding isn't one of 'em in NYC). Everything else is just a matter of tweaking the infinite variables to your particular needs / wallet.

The most obvious variable in the coverage equation is the amount of monetary election. I actually struggled with this quite a bit... the big items (electronics, furniture, appliances) are obvious in your calculation. It's the intangibles like clothing (!), books, movies/cds, etc. that begin to add up if you had to buy all-new, making it a difficult number to determine. I went round and round with agents, as it might be easy to overshoot the amount a total-loss claim might sum, but unless you can prove/identify those items based on the claim criteria, $100k might be totally worthless if you can only "prove" $25k worth of contents -- so it's a bit of a dance. There wasn't a single company I talked to that could definitively and concretely tell me how my claim might be determined, so it's all a matter of finding the amount appropriate for you, and then taking the adequate steps to "document" your existence ahead of time as preparation for the unfortunate possibility of a loss. We'll come back to this. Other major variables include the deductible (one company had $250, most had $500 as the minimum -- I figured my iPhone or computer would be the most likely claim, so I didn't want a $1000 deductible just to get it replaced; go low), the amount of personal liability (I start a fire, burns down apt next door, they sue me for loss; I went with $100k, the default amt), medical liability (some stupidfuck trips over his own feet at one of my parties; I went w/ $1k), and so on. Your agent or quotes may ask you information about your building (age, type, # of floors) but I found I didn't know (or they could look up) some of this information, and much of it didn't factor into my quote anyway. Don't stress about these particular details.

There are an assortment of other variables which might tweak your numbers a bit, but are worth knowing about. You shouldn't hesitate to have your agent run you a few different combo scenarios to decide what's best for you... and have them send the quotes to you in writing. Some places offer discounts for buildings with doormen, fire extinguishers/sprinklers, etc. If your parents have homeowner's insurance with a particular company, ask for a discount. If you own a car (for some strange reason), check with that provider as well. Your coverage might come with a small amount of "damage to personal property of others" coverage, which might apply to a scenario where you were visiting a friend and dropped his laptop. Oopsie. (Mine is set at the min, $500.) You can also dial up and down the default coverage caps on different types of claim materials. My computer coverage is actually capped at $5k, but I believe peripherals and other electronics fall outside this limit, so I kept it there (you can buy an increase for a small sum, like $13/year). They also limit weird things like "jewelry and furs" ($1k), "silverware and goldware" ($2.5k), and "firearms" (ha, $2.5k). State Farm wasn't willing to decrease coverage on these items for me (I don't gots guns, furs, tapestries, or major jewelry) in exchange for upping others (compy), but it's worth asking or adjusting your numbers as appropriate to your situation.

[Note: I've added the State Farm Renter's Insurance Brochure for your perusal.]

Examples of Coverage (You Might Not Expect).
(but you should confirm with your agent, of course)

• placement relocation and expenses in the event of a loss (for up to 2 years)
• personal liability and protection that follows you worldwide (ex: lost luggage or compy stolen overseas!)
• supplemental health coverage (I thought State Farm's was stupid)
• weird perils: impact by vehicle, falling objects (crane!), smoke, sudden water discharge from plumbing appliances / heating or cooling systems, water damage from fire sprinklers, breakage of glass, power surge
• not covered weird perils: flood, earthquake/mudslide, damage by nuclear hazard, events of war
• mold in your apt (have your landlord cover before you shell out)
• credit card and bank forgery
• don't have a lease? doesn't matter... moving? your coverage follows you (just let them know 1 day prior to moving)
• bedbugs (not for State Farm, but I've heard some others cover it)
• State Farm lets you add another person to your account, which makes it perfect for a partner or roommate. Why not double your coverage and split it with your roommie? It'll end up cheaper for the both of you, but be sure to discuss what might/should happen if one of you needs to make a claim and the rates go up.

Nuances.

• "Business Use limitations" (often $1k)... I'm still not clear about this. I often have "self-employment" income when it comes to my taxes, but I'm not sure if they'd screw me based on this. I urge you to find out for yourself if it applies.
• I read somewhere that getting an appraisal might lower your rates (it didn't for State Farm).
• Making a claim within a certain amount of time after starting your insurance doesn't look good. They might drop you or skyrocket your coverage price. Just be careful about making unnecessary claims.

Personal Articles Policy: Icing on the Cake.

This was the thing that made me choose State Farm Insurance over all others. I wanted my iPhone covered and I wasn't going to back down. I had read about some people having luck getting this coverage as a separate rider, and I wanted it. Freddy (my agent) worked with me to get to the bottom of it all. Turns out State Farm has a "Personal Articles Policy" that can be applied separately. Simply put, you choose the amount of coverage you want on a particular item (or a few) and it's covered separately from your Renter's Policy.

In my case, I (originally) wanted my $650 v1 iPhone covered, handsdown. This policy has no deductible and is all-risk inclusive, meaning if I leave it at a bar, drop it in the river, leave it in a cab, get it stolen from my desk, or it simply stops working and Apple won't cover it (I still suggest AppleCare), I'm covered. $33/year gets me $1000 in coverage (the min), but you can balloon that up a bit if you want to additionally cover your laptop, for instance. I got a bit of pushback when I updated my coverage to my 3G phone upgrade, since I paid "only" $350 for it (I guess $400 was the minimum), but when I explained that the replacement cost for the phone would actually be much greater (I'd no longer be eligible for the AT&T supplement, so it'd cost me about $500 + taxes to replace) and should be covered at this amount. He spoke directly with the underwriter and all I had to do was provide documentation from AT&T referencing what the replacement cost would be for my account (I just logged into AT&T and went through the cart process for buying another iPhone... it seemed to calculate my eligibility correctly. Print to PDF and emailed to agent and I was set.) I highly recommend this to iPhone peeps, or for those with high-risk items like a laptop or engagement ring or whatever. Go State Farm! (Just know that you should try to avoid claims on this rider within the first 60 or 90 days, as they might drop you after payout.)

Coverage Preparation:

"The Insured always has the burden to prove value on items. This can be receipts, credit card statements and even photos. Instruction manuals, warranty cards and serial #s can be useful as evidence." (Email from agent)

"Take inventory and photos of your possessions. Place this and other important documents in a safe deposit box or a separate location." (State Farm Brochure)

This is the part where it really makes the difference. Having the $25k coverage I've got will only take me so far if I can only document $10k of it. And I'll admit, I've had my coverage for about a month now and I've yet to document my belongings the way I know I should. (I'm hoping pictures of my room, and the misc pics from parties and whatnot will work in the interim.)

The "copies of receipts / photos in a safe deposit box" approach seems a little antiquated for my Web 2.0 tastes. Nowadays, it's just as easy to store your digital receipts, pictures, YouTube video walkthrus, PDFs of credit card statement big purchases, and all that jazz on an iDisk account, Google Documents, or even tucked away in the bottom of your Gmail account. I definitely recommend picking 2 locations (I'll probably put copies in a fire-proof safe as well as online) to be on the safe side. (While you're at it, you should get in the habit of backing up your computer as well!)

I found a few websites that give you a few different options to document online, but I haven't tried them out yet. They all seem to have their drawbacks, but it can't hurt as starting point or a way to help you get organized for the things you might not think of. In the end, you can always make a PDF of your inventory page. Try a few of these to get yourself started (here, here and here). If anyone finds a better method, let me know.

With the advent of digital cameras, it's too easy not to do a quick walkthru of your apt snapping a bunch of photos. I've been told that pictures and video (those digital cameras take great video, too!) can be a bit more difficult for claim agents to process, but it's certainly better than nothing and a good way to get an idea of what weird, little crap you have (knickknacks, books, movies, clothes). I definitely recommend receipts + serial numbers for the big-ticket electronics, as they're just too pricey to gamble on.

My Agent:
I'm more than happy with my agent who helped me sift through all this madness, as well as spending a few hours with me on the phone whenever I had a few idiotic questions. He's great and always (eventually) responds to emails. If you call him, tell him I sent you! (I don't get any commission or discount.)

Freddy Zambrano
Licensed Sales Associate
State Farm Insurance Co.
58 West 8th Street
New York, NY. 10011
Office: 212.253.2230
Fax: 212.253.2236
freddy@thewaddleagency.com
thewaddleagency.com

Let me know if you have any additional questions, or any experiences of your own to share. I have a feeling I'll constantly be referring friends to this (lengthy) post, so I'd like it to be as helpful as possible. Best of luck. Now I just need to appropriately document my apt...

Picture: The view from my roof.