Why residents of New York should insure property and how to do it

Tenant insurance is something that everyone who rents a home in New York should do. It is simple, inexpensive and worth the effort. In this publication edition 6sqft explains why this is an important investment and which insurance company might be best for you.

Why do I need insurance

Some tenants may have the impression that the homeowners policy also covers items that are in the apartment itself in case of theft or damage. However, as a rule, this is not so. So, in the event of a pipe break or a fire, the homeowner's policy covers only the damage to the building, but not to the destroyed items in the apartment.

A prerequisite for a home buyer in a mortgage by the bank is the availability of insurance. At the same time, tenants are not required to draw it up. According to a study by the Institute of Insurance Information for 2018, 91% of homeowners have homeowner insurance, while among tenants the number is only 46%.

“The fact that this is not mandatory does not mean that it is a bad idea (take out insurance - Ed.). Renters insurance is relatively cheap. It is easy to design and easy to change or abandon. You get peace of mind and compensation if something happens to your belongings, ”the message says.

After insurance, you can get compensation if your apartment is robbed or flooded, and your things are destroyed. To do this, you only need to file a lawsuit.

Compensation covers the cost of replacing damaged or destroyed items. In addition, you are compensated for the cost of living in a hotel for the period while your apartment will be renovated.

What insurance covers

Tenant insurance usually covers items damaged or lost as a result of one of the following situations, according to PolicyGenius: fire and lightning, storm and hail, explosions, riots, smoke damage, vandalism, theft, volcanic eruption, falling objects, from snow, ice, damage from steam / water heating appliances / systems, leakage or overflow of water or steam, freezing of water pipes, heating, air conditioning, damage from short circuits caused by electrical appliances and some rye others.

Sometimes, high-value items like jewelry, electronics, and art are only covered up to a certain total cost - say, up to $ 1500. The good news is that you can fully insure them for a small additional cost.

In addition to insuring your personal property, tenant insurance offers liability coverage up to the limit of the insurance policy, usually at least $ 100 thousand. This protects you financially in the event of lawsuits for personal injury or property damage caused by you, your family members or pets. For example, if the leak occurred through your fault, as a result of which your neighbor’s apartment was damaged, the damage caused to him is covered by your insurance policy.

What does not cover the insurance policy

Most tenant insurance policies do not cover damage from floods, earthquakes, natural disasters, pests (such as bedbugs), terrorism or war.

Some rules do not apply to certain dog breeds. Also, your premium may be higher for certain types of pets.

Insurance Compensation

The compensation that you will receive in the event of a claim depends on the type of policy you have issued. Therefore, at the decision-making stage, it is important to understand how they differ.

There are two main insurance coverage: the actual cash value is paid for replacing your personal property at its amortized cost, to the limit of the policy. Replacement costs are paid for replacing your personal property at its actual value, and not at amortized cost, within the limit of the policy. Replacement replacement costs typically cost about 10% more, but they are likely to provide sufficient compensation to actually replace your items, the source said.

According to PolicyGenius, the total coverage is as follows:

• $ 25 thousand - coverage of damage to your personal property: covers the cost of replacing or repairing things if they are damaged or stolen.
• $ 300 Liability Insurance: covers legal costs associated with damage or injury to your apartment.
• $ 2 medical expenses: covers medical expenses for anyone injured in your apartment.
• Coverage of $ 10 thousand for the loss of the ability to use property: covers the cost of living, meals and much more if it is impossible to live in your apartment due to damage.

The insurance indemnity can be paid out very quickly - from several days to several weeks - it depends on the insurance company and the type of indemnity.

Who is insured

In addition to you, your policy usually covers your spouse or with whom you live, as well as other close relatives who live with you.

Also, most policies cover one of the roommates - for this they must be indicated on the policy. However, do not think that you are covered by the policy for renting your neighbor’s apartment, unless you are mentioned in his policy. In addition, if you apply, both you and your roommate will receive an equal share of the payment, regardless of whether he is still living with you. Therefore, do not forget to cross out the neighbor from the policy if he moves out.

Most policies won't cover additional unrelated roommates - they'll have to get their own policies.

Insurance cost

A typical tenant insurance policy is about $ 185 per year, according to the National Association of Insurance Commissioners (NAIC). According to PolicyGenius insurance company, an average policy costs $ 300 a year. Monthly insurance premiums range from $ 11 to $ 21 per month on average. The cost of the policy for tenants depends on the total cost of insurance, on your location, credit rating and what type of policy you have chosen.

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Deductions are the amount you pay out of pocket for insurance before insurance begins. Typically, you can opt for policies with higher or lower deductions. Renters' insurance deductions are typically between $ 250 and $ 1000. Higher deductions usually mean lower premiums.

Which insurance agency to choose

It may depend on your specific needs, but the policies of most tenants are quite similar. To get started, find out about monthly insurance premiums, deductible options, any additional covered items, upper limits and insurance claim limits, as well as what restrictions the policy may impose.

Less important things to consider include having an app or online help with questions and complaints. Most well-known insurers have good policies, comparable insurance premiums and offer similar coverage.

The difference among the leading insurance companies is small, premiums can vary, but only in a small range. For example, a sample of monthly premiums for Lemonade insurance company is $ 11,25 per month, compared to $ 21 per month for Allstate. Make sure you check the text in small print and the amount of coverage indicated.

USAA, for example, is one of the few providers that cover weather-related flood damage, but is only available to military personnel, veterans, and their families.

Where to start before taking out insurance

To get started, take an inventory of your items. You can do it yourself by taking a picture of everything you want and write down how much you paid for these things, or how much it will cost to replace them.

You can also record this process on video by documenting each thing. There are home inventory applications such as Encircle, which allow you to take pictures and document objects directly from your smartphone. Allstate offers its customers to use the Digital Locker application.

If you have any questions, you can always contact an insurance broker - he will help you compare different policies and choose the most suitable for you.