I always paid for the bare minimum insurance coverage — until a renters insurance nightmare completely changed my mind

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• After my upstairs neighbor's kitchen caught fire, I couldn't live in my apartment for a month.
• I was lucky enough to have friends who put me up, but I still felt wildly unstable. 
• Once things settled down, I built myself a safety net in case else anything happened — another apartment disaster, a medical bill, or even my death. 

As a relatively healthy, single 27-year-old, paying for life insurance has never really been high on my list of spending priorities. 

I'd pay for the bare minimum insurance requirements. Health insurance? Sure. Dental and vision? OK. Renter's insurance? Only because my landlords required it. 

I have mounds of student loan debt and more credit card debt than I care to admit to. My focus has been on paying those debts off and covering my rent and other bills. I was more interested in spending on travel, delicious meals with friends, things that brought me happiness — life insurance never even remotely made the list. 

Then my fourth-floor apartment flooded. 

A renter's insurance nightmare pushed me to get life insurance

On an unseasonably warm Wednesday night in March, a stove fire in the unit four floors above my D.C. apartment forced residents to evacuate the building. 

Thankfully, no one was hurt, but as I re-entered my apartment, I knew something was wrong. Water was gushing from the air vent in the bathroom ceiling, running down the walls, and bubbling the paint.

I quickly put a bucket under the leak, threw towels on the wet floor, and ran back downstairs to ask for help. A firefighter told me that once you fill a fire hose, you have to expel it — completely. And in the process of putting out the fire, they had to use the entire fire hose. The water leaked down to every unit below.

Suffice to say, it was a sleepless night. And I couldn't stay in my apartment after that. 

The walls were soaked through. Water had seeped under the floorboards, and the electrical had to be shut off and rewired. I needed all new ventilation and ceiling lights, the floorboards would have to be ripped up so the floor could dry, and the water that dripped down the bathroom walls also dripped into the water heater/laundry closet, causing the water heater to fall off the wall and rest precariously on my washer/dryer.

The leasing office told me that the damage would need to be inspected, but my renter's insurance policy should cover any damage and temporary housing. The next morning as I went to consult my insurance policy, I couldn't find the updated document. I had moved in several months earlier and had renewed a policy that was originally for another apartment. So I called my insurance agency. They couldn't find the policy either.

That seemed odd. I'm fairly organized and keep paper records of important documents, but there was no sign of the updated policy. Then I checked my bank statements and realized I had not paid for insurance in months. I was terrified.

After quite a bit of back and forth with the insurance agency, I found a record of a call I had with my agent months prior in which I authorized him to renew my policy. The agent never followed up on it. 

I also had to find a place to live temporarily, not knowing if I'd be able to claim the expense. The building's parent company was useless, except to promise that they'd move as fast as they could on the repairs. But a one-week estimate turned into two, and two turned into a full month displaced. 

To make things worse, I was on the job hunt at the time, mostly freelancing, with no vision or dental insurance. I only had the bare minimum healthcare option to comply with the Affordable Care Act. The lack of a steady stream of income, with the ever-looming cloud of debt, provided constant anxiety. And now this.

Changing my spending habits — and building myself a safety net

The flood left me feeling wildly unstable. I had a breakdown on my friend's living room floor over a Chick-fil-A order, and I knew this was a low point. I vowed to do whatever it would take to make sure I never had to feel this way again. I needed to build myself a safety net — and that started with insurance. 

After two weeks of haranguing various low-level customer service agents, the agency finally admitted that I was covered; they just had never finished processing my policy. Now it was five months later and they would process it. 

Luckily, my possessions were mostly spared any major water damage, so I didn't have much to claim. As far as my living situation, I'm fortunate to have generous friends in the city who took me in for various amounts of time over the month I was without a home,

I was fed up with my renter's insurance provider, though, so as part of my new safety net, I started over with a competitor that offered me a fair rate ($295 per year) and an easy process. 

By the time I was back in my apartment, I had gotten a full-time offer from my temp job and things were finally looking up. My downward spiral was finally stabilizing and I felt like I could breathe again. 

I finally got life insurance

After many nights of talking about the renter's insurance nightmare to friends and family, someone brought up life insurance. Maybe it was time to rethink it. 

Insurance is not something you really want until you need it. I didn't think I could go through being displaced for another month if something else happened to my apartment, so I invested in a solid renter's insurance policy. Why would I think about life insurance differently?

I cover myself from other disaster scenarios, why wouldn't I add life insurance as well? 

This logic led me to a 20-year term life insurance policy valued at $800,000. I locked in a low rate ($308 a year) while I'm healthy and without any dependents. The process wasn't particularly difficult, and given my recent turn into an insurance evangelist, this was the final piece of the pie. 

This article was originally published in November 2019.