Renter's insurance

by Margaret Boyd

UI senior Cody Kenkel has a Dell desktop computer, a flat-screen TV, a queen-sized bed, an Xbox 360, and a closet full of clothes. The contents of his apartment bedroom are representative of the contents in the room of a typical college student. The difference between Cody Kenkel’s stuff and that of many other UI students is that his possessions are protected by renters’ insurance.

Kenkel said he has rented apartments in Iowa City for three years, and this is the first year he has invested in renters insurance or “even thought about it, for that matter.” This year, Kenkel bought renters’ insurance because his landlord required it.

Kenkel’s landlord, John Faselt, owns five rental properties in Iowa City. He is one of the few landlords in the area that requires his tenants to buy renters’ insurance.

“An apartment owner only pays to insure their building and the land that the building stands on,” said Theresa Weeks, a State Farm Insurance agent. “The only way a landlord is responsible for damaged tenant property is if it is the result of landlord negligence [or failure to maintain the property].”

“It’s in the best interest of the tenant [to buy renters’ insurance]. My insurance does not cover loss of property,” Faselt said. “A lot of renters don’t really understand that it is in their best interest, like if there was another tornado, for example.”

A basic renters’ insurance policy costs around $15 per month and will protect damaged, stolen or destroyed personal property. The policy will cover damage of possessions due to smoke, fire, wind, and water.

UI senior Sam Gold has had experience with all four kinds of damage that put renters’ insurance to use.

In October, Gold was displaced from his 804 N. Dubuque St. apartment for two days by a fire that began in a grill on a fire escape. Last year, the April 13 tornado ripped the roof off of his apartment building and many of Gold’s belongings were damaged by rain.

Gold had renters’ insurance on neither occasion. Luckily, most of Gold’s possessions were covered by an extension of his parents’ homeowners’ insurance.

Doug Myrick, agency executive for Insurance Policy Centres LLC, 521 Highway 1 west, said most students have $5000 to $10000 in belongings with them while they’re away at school.

As Gold could attest, an incident that could result in damaged property is not as improbable as most renters may think. However, according to Weeks, just 25 and 50 percent of tenants buy renters’ insurance nationwide.

“It’s not far-fetched to assume that in comparison to the number of rental properties in Iowa City the number of people who buy renters insurance is low,” Myrick said.

There are currently there are 30,209 students enrolled at the UI for fall 2007, according to the University of Iowa registrar’s office. There are 5,407 spots for students to live in dorms. That leaves 24, 802 students who live off campus. That number added to any non-student renters forms a substantial rental market.

Myrick said one reason why many renters do not buy insurance is because it is not legally mandated.

“If you buy house, the bank says, ‘You’re going to have insurance on this house,’” he said. “If you buy a car, it says, ‘You’re going to have insurance on this car’.”

However, a landlord can require renters’ insurance as part of a lease. Of the 20 rental companies and landlords contacted in the Iowa City area, only three, including Faselt, said that they require their tenants to have renters’ insurance, though the majority of landlords said that they recommend it.

Former UI student Brianna Waldorf bought renters insurance this year because her lease for Seville Apartments required it.

Seville Apartments, Emerald Court, Westgate Villas, Parkside Manor Apartments, Park Place Apartments, and Scotsdale Apartments are all owned by Barker Apartments. To move into an apartment owned by Barker, a tenant must have a renters’ insurance policy within 24 hours of signing a lease.

Susan Dozark, the apartment manager at Emerald Court, said that there was a specific incident that led to the inclusion of the renters’ insurance lease condition.

She said that a few years ago, some students left a pan of grease on the stove that started a fire. The fire caused burn damage in the apartment and water damage in the apartment below it.

“It was a mess, but they had renters insurance,” Dozark said. “It just affirmed the fact that renters insurance is needed.”

Renters’ insurance information is available at most rental company offices, but a major rental company that requires tenants to have renters insurance is hard to come by. Barker Apartments seemed to be the exception for large rental companies.

As an independent landlord, Faselt does not own as many properties as most of the larger rental companies.

“I guess other companies don’t care as much,” he said.