Flood Insurance
Overall, most losses that could have been at least partially covered have been accrued by renters. Many renters do not even realize that renter’s insurance is available and at a minimal cost. Today, when it is getting harder and harder to purchase a home and when more people are being forced out of their homes, renter’s insurance should be a primary consideration; one that far outweighs the small cash outlay in order to have your belongings protected.
Renter’s insurance comes in many shape or forms. The best way to determine your needs and to make sure that you are covered in the event of an emergency is to sit down with an insurance agent. Those of you who have automobile insurance are at an advantage, as your rates for both your auto and renter’s insurance will most likely be decreased when carrying both with the same agent. If that is not the case, you might want to consider shopping around and changing agents. Many agents are independent, which means they have the flexibility to change the ‘up-front’ pricing in order to keep your business. You also want to make sure that the agent you are dealing with knows of a security system, either individually or on your own unit, a fire extinguisher readily available, smoke and fire detectors installed and special deadbolt or other locks that have been installed for safety purposes. Some states have laws on the books that require your landlord provide some of these services, but they can save you on a renter’s insurance policy as well, regardless of who provides them.
When it comes to natural disasters, the area you live in should determine your insurance needs. Basic renter’s insurance will usually only cover fire, theft, and something like a water-pipe bursting-the rule of thumb is usually an event that is sudden and unexpected and that does not fall under the category of a natural disaster. Your renter’s policy should also include alternatives for housing if your current residence becomes uninhabitable. True, a homeowner’s or apartment complex’s policy will cover the structure, exterior and the grounds, but that does not mean that there will be allowances for anyone living there. It also does not mean that your vehicle will be covered in a parking structure. That is completely up to the renter. Also make sure that you cover any outside storage unit in which you have stored your belongings.
If you live in California, for instance, you will probably want to have earthquake insurance. In Florida or South Texas you would want to have hurricane insurance and in Oklahoma or Central and Northern Texas you would want to have tornado insurance.
The risk of flood can be present in all 50 states and must be decided upon dependent on the area that you live in. The Federal Emergency Management Agency (FEMA) has flood maps that show the 100-year flooding risk by area for flood plains, sheet flow flooding or for stream and river flood areas. If you live in one of these areas then you should definitely have flood insurance. Most insurance agents can either obtain the necessary policy for you or can point you in the right direction in order to acquire one. If, on the other hand, you are not in a FEMA projected 100-year flood area, pay attention to where you are moving to or living. Take a look at your community and determine if you live close to any body of water, such as a lake, creek, dam, levee or river. Also be aware that snow melt can be a big factor and though you may not live near a body of water, state or local records may show flood activity on a path due to snow melt. Also question the landlord or neighbors about past flooding problems. Some basements, for example, may only flood in heavy rain or with the rain blowing from a particular direction. A musty smelling carpet or tell-tale water stains on the baseboards should prompt you to ask the right questions. Be sure to note on your move-in inspection that you noticed these issues or any that you consider questionable and that you asked the landlord or leasing agent. Make a note of their response to your question and keep a copy! In fact, some landlords will not even ask you to do a move-in inspection and then be more than willing to charge you for damages that you may not have had anything to do with. Make your own report if you are not offered an opportunity to do so and give the landlord a copy.
Also, ask the agent the right questions; this is one instance where you definitely want to READ the entire policy. Exclusions written in fine print are standard procedure on most insurance policies and though many of them are common, you don’t want to find out that you are not covered if your neighbor’s pool overflows or breaks and floods the basement you are renting. There is no guarantee that the owner or renter next door has the insurance to cover such an eventuality, so if the possibility exists, it might be better to cover it, regardless how remote the possibility. You only have to watch a little reality television or America’s Funniest Home Videos to know that IF something can go wrong-it usually does.
When you are buying insurance to protect your belongings, it is definitely a good rule to be the pessimist. Being an optimist and/or thinking “that can never happen to me” is a good way to find yourself deeply in debt due to not being covered when the bathtub from upstairs crashes through your ceiling and lands on your baby grand piano or your big screen TV.
