5 Things I Learned From My First Renters Insurance Claim

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• When I got renters insurance, I guessed how much I needed.
• After a major flood, I realized I was underinsured.
• I also learned the value of documenting everything, having an emergency fund, and taking time to recover.

Last summer, I found an amazing condo in the perfect location for rent. Shortly after moving in, I felt settled, but that feeling wouldn’t last long.

Right before Christmas, the temperatures in Atlanta hit single digits. Everyone was worried about their pipes bursting. While I was away visiting family for the holidays, I discovered that my condo had flooded.

The worst part about the flood was that it wasn’t from my pipes; it started from the neighbor two floors up and eventually ended in my condo (on the first floor). The damage was extensive. An inch of water covered my entire place. My relaxing holiday was cut short, and the following months were nothing like I’d ever experienced.

I’ve had my share of car accidents and auto insurance claims, but this was my first time having a major loss and filing a renters insurance claim. Here are the most valuable lessons I learned.

1. Make sure you have enough coverage

When it was time to get renters insurance, I did what most people do when valuing my personal property: make a wild guess and hope for the best. I had never reviewed my belongings in detail to see if my coverage limit was sufficient, even after inheriting antique furniture and purchasing high-quality items.

After filing my claim with the insurance company, I had to make a list of everything that needed to be replaced, including the approximate value of each item. Seeing the amounts add up made me realize that I was significantly underinsured. I lost about half of my possessions, valued at nearly my full coverage amount. I would have been on the hook for thousands more if I had experienced a total loss.

After my claim was finalized and I started replacing items, I increased my personal property coverage to a more appropriate amount. The combination of a claim on my record and higher personal property coverage costs me more in premiums, but it’s worth it to me now.

2. An emergency fund is a must

An insurance claim takes time. It could be months before you receive your full settlement, and as a result, you will have to pay some expenses out of pocket and submit receipts for reimbursement. In my case, I stayed in a hotel for the first two weeks. My insurance covered my relocation expenses. At the hotel, I had to pay for eating out and doing laundry since I had no direct access to a kitchen, washer, or dryer.

I realized I’d be in temporary housing for a while, and since I work from home, I opted to end my stay in an Airbnb. It was cheaper long-term than a hotel — which meant my living expense benefit lasted longer.

The relocation company only allowed direct billing for hotels, so I had to pay for the Airbnb upfront. I paid thousands out of pocket before getting reimbursed. Thankfully, I had an emergency fund that I started years ago for these unforeseen scenarios.

3. Document, document

To process my claim, I had to submit documentation of everything damaged or destroyed. The more details, especially for valuable items, the faster your claim is processed. I was fortunate to have access to my damaged items. I started by recording a video of the damage and all my belongings. I talked throughout the video, opening drawers, closets, and cabinets. I also took photos of high-cost items to provide evidence of their value. I used the recording to make an itemized list of what needed to be replaced.

When making your list, make sure to include a detailed description of the item, date acquired, and purchase price (with copies of receipts if you have them). If you have a video and photos to accompany the list, it’s helpful to include the room or location of each item. In addition, be sure to keep receipts from any expenses you incur along the way so you can submit them for reimbursement.

4. Your payments come in stages

With renters and homeowners insurance policies, you can insure your personal property for replacement cost value or actual cash value (replacement cost value minus depreciation). Since I had replacement cost coverage, I assumed that I would receive a single check for the total value of items lost. My insurance initially paid only a portion of the claim and held back an amount known as recoverable depreciation. Once I could show that I used the money to buy new items, I received a second payment for the balance. This is to prevent insurance fraud.

You don’t have to replace every item you lost. You can receive the total claim as long as you show that you used a significant portion of the insurance payment to purchase new items. If you have to relocate temporarily and receive reimbursements for additional living expenses, those payments might also come over time as you incur the costs and submit receipts.

5. Give yourself grace and time to adjust

Moving is already a stressful and emotional experience, but moving with no notice and losing a significant portion of your belongings is traumatic. At times, getting things in order felt like a full-time job. Plus, some unexpected events delayed the process. My insurance adjuster got COVID-19 and was out of work for a while. The person I hired to move items into storage got in a car accident, so I postponed the moving date. Months later, I’m still dealing with being displaced, putting things in storage, replacing belongings, finding a new place to live, and unpacking.

I learned to prioritize self-care and give myself grace as I caught up with work and restored my personal life. I’m forever grateful for friends and family who stepped in to help and clients who remain patient as I work to get caught up.

No one wants to think of the unthinkable, but the reality is that unexpected events take place. We must be prepared to protect our belongings and, frankly, our sanity. Getting through a disaster takes a lot of patience and time. Align yourself with resources upfront so you can get back on your feet and resume normalcy in due time.

This article was originally published in June 2023.