Renter's Insurance in California

[Noah930]

Since there are so many on this board on both sides of the housing coin, just wondering what the law actually stipulates, here in California. As a renter, am I obliged to purchase renter's insurance? And, if so, how much?

I ask, as there is a clause in my lease that requires $500K of renter's insurance. At my expense. And the leasing company and owners are to be listed on the policy, as well. The last time I rented anything in California was about 15 years ago, and I certainly don't recall anything like this. Most recently, I've lived in Massachusetts and Oregon; there certainly aren't laws/protocols like that in those 2 states. It just seems a bit excessive to purchase an insurance policy for a monetary value that exceeds not only the value of my "stuff," but the cumulative value of my entire life's income, as well.

[slodave]

I rent a Town Home and I do not have renter's insurance and I am not required to. I am not sure what the difference would be in your situation, but it does seem to be high.

Dave

[Porsche-O-Phile]

No.

I don't bother and probably won't. If any place I was looking to PAY to live in tried to force me to do so, I'd laugh in their face and go elsewhere.

[Evans, Marv]

I agree with Jeff. A landlord can pretty much put anything in a lease/Rental agreement and try to get away with whatever they can. When it comes to enforcing it is another thing. If they try to pull this kind of stuff even before you sign the lease, just imagine what they might try to do afterwards.

[EdT82SC]

The $500K is for liability, and not lost property. They are trying to get your insurance to foot the bill if something happens on their property, and someone wants to sue. They'll always go after the property owner, but if the renter has a liability policy they'll go after you too. If you don't have a liability policy they might ignore you because it's not worth their time since most renters don't have many assets to go after.

I never had a renter's policy when I rented because back when I rented all of my assets were worth only a few thousand dollars.

[Noah930]

So, I'm getting taken, huh? They're looking for me (the renter) to pay for the insurance that they (the owners) should be paying for.

I also noticed that the security deposit is to be returned sans interest. Is that also SOP in California?

[EdT82SC]

I'm sure the owners have their own liability policy. Any mortgage requires it. They're just looking for you to share the burden if any lawsuits pop up.

I've never gotten any interest on a deposit, and many of the apartment complexes actively defraud people by charging jacked up prices to fix or clean things that don't need it, or are covered under normal wear and tear. (e.g. you can't charge to paint if they've been in for more then 18 months, etc.)

[legion]

This is HIGHLY unusual.

When I lived in an apartment, I paid around $10 a month for $30k of coverage on my property. There was no liability on the policy.

Renter's insurance usually covers your property. The liability is usually left to the property owner. In fact, I don't think most insurers will extend liability to a rental policy because you don't have control of the property. I think this is an attempt by the property owner's lawyer to push liability coverage down to you--without knowledge that it is probably impossible for you to get such coverage.

I'd ask to have that provision striked.

[Porsche-O-Phile]

That is highly unusual also. Our security deposits have always been held in interest-bearing accounts (we've lived in two different places here in southern CA, including the one we're currently in).

Sounds to me like it's time to look someplace else. There are a gazillion apartments out there and good tenants are a valuable commodity. They're idiots to be quibbling over such stuff with someone like yourself, who will undoubtedly be a good tenant, not cause any problems and be there a long time.

Is this one of those "overly managed" big complex-type developments? Those tend to be the worst, IMO. Our current place is great - it's owned by some 80-year-old Pakistani woman and managed by a cheapo "property management" company that employs a bunch of "I-don't-care-I-just-want-half-off-my-rent" college students from UCLB. As such, they don't get in our faces much about stupid stuff. As long as there aren't wild parties going on or people breaking stuff and the rents are getting paid on time, they don't come around and let us pretty much do what we want.

That's the way I like it. Most of the neighbors are cool and we have our own unwritten rules about how things get done around here. Nobody ever calls property management unless there are no other options. I've only gone to them once in four years about something (had to have someone kicked out of the unit next door - they were harboring a "transient" girl with a lot of extremely annoying habits, including breaking and helping herself to my stuff).

I've lived in a couple of those big complexes over the years too, and they're always overly-managed by nosy, control-freak types. We actually got threatened with eviction from one once for (of all things) having Christmas lights up on the porch. Of course, so did the rental office, but evidently that didn't matter. That's the mentality you deal with in those places. We were month-to-month so I packed my stuff up and bailed a couple months later, getting progressively sick of their crap (this was back in college).

[turbo6bar]

Actually, a renter's policy does generally cover a tenant's liability(ies). Despite opinion to the contrary, renters can and do have liability for some action and events.

Several years ago, a renter had a kitchen fire, damaging parts of the kitchen. She did not have a renter's policy, which would have covered her liability. I had to make a claim on my policy to cover the damage. State Farm later had me sign paperwork to subrogate my claim against the tenant. I anticipate SF b!tch-slapped her around for me. Of course, I should have never made that claim, as the insurance on all of my properties went up a good bit.

Nevertheless, $500k sounds excessive. I'm not sure why the landlord is willing to stick her neck out like this, while insurance is so cheap.

[kjb]

My wife and I got our renter's insurance practically for free, since having it gave us a better deal on our car insurance. Even though we don't own many valuable things, it'd be nice to be covered if we became victims of burglary.

You may also be liable for things like water damage and kitchen fires as turbo6bar points out. A renter's insurance would cover that.

The net cost to to us is something like $100 a year, which is peanuts compared to what we pay in rent. It may be a good idea to look into, even if your landlord is not bringing it up.

/ J

[Porsche-O-Phile]

If $100 means so little to you, please PayPal me $100.



Sorry to be a smart-ass, but you get my point. ANY money out of your pocket, no matter how seemingly inconsequential, is still money out of your pocket. When it goes for a "service" that you'll likely never use and get nothing in return for, I find it particularly hard to justify.

As far as theft goes, I suppose it's possible, but it would be highly unlikely given how my unit is arranged and where I am within it. Also, I have a neighbor who's a former Navy SEAL and U.S. Marshal (and he works from home, so he's always around), so I think we're reasonably well covered.

[nostatic]

You are not required to have renters insurance. I've had it in the past and want to get it again as I have some musical instruments that I'd like to have covered along with the liability thing.

I just got a check from the interest from my security deposit, so that shouldn't be on the table either.

[Noah930]

I'll have to check into how much a $500K policy costs. The lease is signed and we're moved in, so that's that. I saw the paragraph that mentioned the renter's insurance clause but didn't think much of it as, like kjb pointed out, it's a good thing to have whether mandated or not. But the policy we purchased (through USAA) was just to cover our measly belongings. Costs us about $40/month. I didn't realize the $500K requirement until the rental company, Hammond & Hammond, called us back to say that our policy was inadequate.

[legion]

Sorry, renter's policies do contain some liability coverage. I was thinking of liability in terms of someone slipping and falling in the parking lot (property owner is liable), not in terms of you damaging the apartment.

[Noah930]

Well, the lease (a.k.a. Hammond & Hammond, the property mgmt co.) specifically requires liability coverage. Furthermore, they want the owner and themselves to be named on the policy. So, am I essentially purchasing insurance to cover them? That's the way it looks to me. Their requirement for a policy isn't so altruistic as to cover my losses--sounds like it's to cover their butts.

The lady at USAA was very nice, according to my wife. Says she's upped insurance to $100K before. And $300K is about the highest she's ever seen. She flat out says she's never seen a requirement for $500K of coverage. Nevertheless, bumping up that high would only run us $22 for the entire year, so not a huge deal. Said she can't really add other peoples' names (owners or property mgmt co) to the policy, though.