Even if you don’t own your living space, be sure to insure it

People who own their homes carry homeowners insurance to protect their investment in their home (and because their mortgage company makes them). Homeowners insurance has two basic components — casualty insurance and liability insurance.

The casualty component protects against damage to the insured home and its contents caused by such things as fire, hail, wind, virulent insects, asteroid strikes, neighborhood teenagers, etc. The liability component protects against legal claims brought against the owners of the property alleging that, by their negligence, they have caused injury to someone else and must pay damages as a consequence. Letting the family dog take a chunk out of the pizza delivery man might be an example.

But, in this day and age of high home prices and mobility, lots of people rent the place they live in, and those people need insurance just as much as people who own their homes. Fortunately, this insurance — generally referred to as renters insurance — is readily available.

Renters insurance has the same two components as homeowners insurance — casualty and liability. But the casualty part of the coverage only relates to the renter’s personal property — furniture, clothing, baseball card collection, sports equipment, electronic devices, fish tank (I’m not sure about the fish), microwave oven — and not the structure being rented. Insuring the structure is the landlord’s problem, though the rent paid by the tenant is intended to cover the cost.

Since contents are usually cheaper to replace than buildings, renters insurance is relatively inexpensive. Most, if not all, of the major players in the homeowners insurance industry offer this product so, unless your hobby is, say, bomb making, finding coverage shouldn’t be difficult.

When shopping for renters insurance, as with homeowners insurance, be careful about coverage limits that apply on the casualty side of the policy to certain types of property — for example, cameras, silverware, artwork, computers, dead furry animals turned into coats, etc. For those items to be fully insured, additional coverage and premiums may be required.

You also want to be sure the casualty coverage is not limited to losses that occur at your dwelling, so that cell phones, iPods, laptops, watches, geo-locator devices, BlackBerrys, blueberries and whatever else you might be carrying around with you will at all times, and in all locations, be covered. And you will want coverage that pays for new replacement cost, not just the value of used items. (Used electronic equipment has the value of a paperweight.)

Even if your personal property is of no great economic value, the liability side of the coverage offered by a renters policy is important.

With a lawyer hiding under every rock and people conditioned to blame others for any injury that might befall them, the risk of being sued for negligence is substantial. In the absence of insurance to pay the cost of defending against a claim — even if frivolous — and damages that might be awarded to the claimant, all its takes is a single lawsuit to wipe out your life savings and send you off to bankruptcy court.

Jim Flynn is a local attorney. Contact him c/o The Gazette, P.O. Box 1779, Colorado Springs 80901; fax 578-8836 or e-mail jtflynn325@hotmail.com.