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I couldn’t live in my apartment for a month after my upstairs neighbor’s kitchen caught fire. Luckily I had friends who supported me, but I still felt extremely unstable. After things settled down, I built myself a safety net in case something happened: another disaster at my apartment, medical bills, or even my own death.
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As a relatively healthy, single 27-year-old, paying for life insurance was never high on my spending priorities.
Pay the minimum required insurance premium. Health insurance? of course. What about teeth and eyesight? got it. Renters insurance? Because the landlord requested it.
I have a mountain of student loan debt and more credit card debt than I’d like to admit. I’m focused on paying off these debts and covering my rent and other bills. I was interested in traveling, having good food with friends, and spending money on things that brought me happiness. Life insurance never made the list at all.
Then the fourth floor of my apartment flooded.
Renters insurance nightmare led me to buy life insurance
On an unseasonably warm Wednesday night in March, a stove fire broke out in a unit four floors above a Washington, D.C., apartment building, forcing residents to evacuate the building.
Luckily no one was hurt, but when I got back to my apartment I realized something was wrong. Water was gushing out of the ceiling vent in the bathroom, running down the walls and bubbling paint.
I quickly placed a bucket under the leak, threw a towel on the wet floor, and ran back downstairs to get help. The firefighter told me that once you fill the fire hose with water, you have to drain it completely. And in the process of putting out the fire, we had to use the entire fire hose. Water leaked into each unit below.
Suffice it to say it was a sleepless night. And after that, I couldn’t live in the apartment anymore.
The walls were stained. Water had seeped under the floorboards, and the electricity had to be shut off and rewired. All the ventilation fans and ceiling lights had to be replaced, and the floorboards had to be ripped up to dry the floor. Water that dripped on the bathroom wall also dripped onto the water heater and laundry bin, causing the water heater to fall off the floor. Leaning against the wall, resting precariously on top of the washer/dryer.
The rental office said they would have to inspect the damage, but that the renter’s insurance policy should cover any damage and temporary accommodation. The next morning, when I went to check my insurance policy, I couldn’t find the updated document. I moved in a few months ago and was originally renewing my insurance policy for another apartment. So I called my insurance agent. They couldn’t find a policy either.
That seemed strange. I’m pretty organized and keep a paper trail of important documents, but there was no sign that the policy had been updated. Then I checked my bank statement and realized I hadn’t paid any insurance premiums in months. It was scary.
After many back and forth conversations with my insurance agent, I found a record of a call I made to my insurance agent several months ago to allow my insurance to be renewed. The agent never followed up on it.
I didn’t know if I would be able to claim my expenses, and I had to find a temporary place to live. The building’s parent company was unhelpful other than promising to move forward with repairs as soon as possible. But the estimate of one week turned into two weeks, and then two more weeks turned into a full month of evacuation.
To make matters worse, I was job hunting at the time, mostly freelance, and didn’t have vision or dental insurance. I had minimal medical options to comply with the Affordable Care Act. Without a steady income, the ever-looming cloud of debt was a constant source of anxiety. And now this.
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Change your spending habits – and build your own safety net
The flood made me feel very unstable. I once had a friend’s living room floor malfunction over a Chick-fil-A order, and I knew it was the worst. I vowed to do whatever it took to never feel like this again. I needed to build a safety net for myself and that started with insurance.
After two weeks of harassing various low-level customer service representatives, the agent finally acknowledged that I was covered. They hadn’t finished processing my policy yet. After 5 months they decided to take care of it.
Fortunately, most of my belongings escaped major water damage, so I didn’t have much to claim. As for my living situation, I was fortunate to have generous friends in the city who took me in at various times during the month I was without a home.
But I was fed up with my renters insurance company, so I started over with a competitor who offered fair rates ($295/year) and an easy process as part of my new safety net.
By the time I got back to my apartment, I had gotten a full-time offer from a temp job, and things finally started to look up. My downward spiral finally stabilized and I felt like I could breathe again.
I finally got life insurance
After many nights of talking to friends and family about the nightmare of renters insurance, someone brought up life insurance. Maybe it’s time to reconsider.
Insurance is something you don’t want until you need it. I figured if something else happened to my apartment, I wouldn’t be able to evacuate for another month, so I bought solid renters insurance. Why think differently about life insurance?
I cover myself against other disaster scenarios, but why not add life insurance as well?
This logic led me to take out a 20-year term life insurance policy worth $800,000. I locked in a low interest rate ($308 per year) while I was healthy and had no dependents. The process wasn’t particularly difficult, and considering I’ve recently become an insurance evangelist, this was the last piece of the pie.
This article was originally published in November 2019.
