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> savings wiped out for lack of renter’s insurance Wait what? How does renter's insurance have anything to do with savings? Or are these people who were keepin

by dheera 5y ago

> savings wiped out for lack of renter’s insurance Wait what? How does renter's insurance have anything to do with savings? Or are these people who were keeping wads of cash under their bed? Or is it that they had to use all their savings to buy back all their stuff due to disaster or theft? (which seems weird to me because I imagine most renters tend to have more value in cash+securities than stuff; home owners probably are the opposite because of the sheer value of the home)

detaro 5y ago
Presumably having to spend their savings to pay for something catastrophic renters insurance would have covered.
- tialaramex 5y ago
  Note that the opposite calculation applies if you have (enough) money. One day, some years ago, I wrote a Facebook post something like. "That's interesting. The sound of water which woke me was in fact water pouring from the flat above into the bathroom. Those of you who've always said I should have insurance now get the last laugh". It turns out that the damage was relatively minor except to walls, ceilings and carpets which were - at the time - insured by the building owner, so, I think I spent less than a grand on some re-decorating and it would have been even less if the upstairs neighbour (who needed emergency plumbing etc.) had actually done her paperwork since that's one incident and one insurance claim excess. But the reason I was so calm about it was that I've done the arithmetic years earlier, if my stuff is destroyed I have to buy new stuff, using money, which I have, whereas if I carry insurance I have to pay the premiums every year, also using money, which includes a healthy profit for the insurer. Now, many people have no choice because in reality a bank owns their home, they pay a mortgage and the bank wants no chance of you walking away from that so it insists you also buy insurance. But I don't have a mortgage, I paid cash, and so I don't need to carry insurance. This a really edge case example of the widely true but counter-intuitive observation that being poor is expensive. It isn't at all surprising that the FT would rather blame the poor for their circumstances than help them. Very on brand.
  - allendoerfer 5y ago
    I have made the same calculation regarding a form life insurance, which only pays in case of death. Which in my jurisdiction is a weird product, which makes sense, if you have a little bit to lose, so you are above the minimum guaranteed by society, but you are not already above the point where the effects you described kick in. What makes the calculation even nicer if you are well-off enough to not have to buy it: If you actually put the money into your portfolio instead, each year you do not need it, the advantage increases further through compound interest, so at some point it literally pays for itself, while the insurance premiums would stay exactly the same.
JumpCrisscross 5y ago
> How does renter's insurance have anything to do with what's in the bank? Long story short, damage was caused to the apartment by a house sitter. The landlord sued for the cost of the repairs. The litigation and costs would have been covered by a vanilla renter’s insurance policy.
- superkuh 5y ago
  That's a nice ideal and all but buying food usually comes before renters insurance. $200 a year matters. Seriously. To a lot of the world population that's a lot of money they can't afford to throw away on a chance.
  - JumpCrisscross 5y ago
    > buying food usually comes before renters insurance. $200 a year matters. Seriously. I agree. Was echoing the observation that financial literacy and education can be disconnected. At lower levels of income, the key lessons tend to revolve around the cost of check cashing and payday lending, avoiding banks that charge fees, doing your taxes and getting your credits and refund and keeping an eye on recurring bills.

by dheera 5y ago

detaro 5y ago

Presumably having to spend their savings to pay for something catastrophic renters insurance would have covered.

tialaramex 5y ago
Note that the opposite calculation applies if you have (enough) money. One day, some years ago, I wrote a Facebook post something like. "That's interesting. The sound of water which woke me was in fact water pouring from the flat above into the bathroom. Those of you who've always said I should have insurance now get the last laugh". It turns out that the damage was relatively minor except to walls, ceilings and carpets which were - at the time - insured by the building owner, so, I think I spent less than a grand on some re-decorating and it would have been even less if the upstairs neighbour (who needed emergency plumbing etc.) had actually done her paperwork since that's one incident and one insurance claim excess. But the reason I was so calm about it was that I've done the arithmetic years earlier, if my stuff is destroyed I have to buy new stuff, using money, which I have, whereas if I carry insurance I have to pay the premiums every year, also using money, which includes a healthy profit for the insurer. Now, many people have no choice because in reality a bank owns their home, they pay a mortgage and the bank wants no chance of you walking away from that so it insists you also buy insurance. But I don't have a mortgage, I paid cash, and so I don't need to carry insurance. This a really edge case example of the widely true but counter-intuitive observation that being poor is expensive. It isn't at all surprising that the FT would rather blame the poor for their circumstances than help them. Very on brand.
- allendoerfer 5y ago
  I have made the same calculation regarding a form life insurance, which only pays in case of death. Which in my jurisdiction is a weird product, which makes sense, if you have a little bit to lose, so you are above the minimum guaranteed by society, but you are not already above the point where the effects you described kick in. What makes the calculation even nicer if you are well-off enough to not have to buy it: If you actually put the money into your portfolio instead, each year you do not need it, the advantage increases further through compound interest, so at some point it literally pays for itself, while the insurance premiums would stay exactly the same.

JumpCrisscross 5y ago

> How does renter's insurance have anything to do with what's in the bank? Long story short, damage was caused to the apartment by a house sitter. The landlord sued for the cost of the repairs. The litigation and costs would have been covered by a vanilla renter’s insurance policy.

superkuh 5y ago
That's a nice ideal and all but buying food usually comes before renters insurance. $200 a year matters. Seriously. To a lot of the world population that's a lot of money they can't afford to throw away on a chance.
- JumpCrisscross 5y ago
  > buying food usually comes before renters insurance. $200 a year matters. Seriously. I agree. Was echoing the observation that financial literacy and education can be disconnected. At lower levels of income, the key lessons tend to revolve around the cost of check cashing and payday lending, avoiding banks that charge fees, doing your taxes and getting your credits and refund and keeping an eye on recurring bills.