Insurance: What You’re Missing

9 Year Mortgage Reviews the Insurance Coverage You Should Have

Whether you are a homeowner or a renter, there are probably a few insurance policies you are skimping out on. You might simply believe you do not need it, are unaware it exists, or think that it is already covered in your current policies. The truth is, for most of us, it will take a major disaster or other unfortunate event to make us realize we should have bulked up on insurance coverage.  Remember with insurance, it’s always better to be safe than sorry!

Renters Insurance – What 9 Year Mortgage Thinks You Should Know

In the US, one out of every three people you see is a “renting” their current domicile. Renters insurance is one of the most widely overlooked forms of insurance. People think “I’m only living here for a little while, so I don’t really need insurance.” Whether you are a college student living in a dorm or an apartment, family renting a house, or you are staying in a assisted living center, chances are your contract does not cover your personal belongings nor injuries that could occur on your property. A word to the wise: If you don’t own the place where you live- you NEED renters insurance.  Further, some homeowners insurance policies do not cover personal belongings, so even if you own your home, you may need renters insurance to protect your personal property.

Roughly 67% of renters are uninsured. 9 Year Mortgage highly recommends renters insurance to all of their financial clients. Renters insurance is generally inexpensive; for $100 to $300 a year, you can be covered. You can even work out a deal with most insurance agencies and pay by month if you can’t afford paying it in full at the time of purchase. Many auto insurance companies provide multi-policy discounts that further reduce the cost of insurance.  Because of the expected rise in renters, two-thirds of apartments won’t rent to potential clients unless they can show proof of renters insurance. Some may think they shouldn’t be forced into having renters insurance, by doing this the tenants will not be financially stressed or try to file a lawsuit against the landlord to recoup their losses if a fire or property loss occurs.

So what is actually covered under renters insurance you ask?

The list of covered items is long and includes things you would have never have guessed! You are typically covered if your personal property gets damaged due to the following (be sure to check the fine print on your policy):

  • Break-ins, Theft, and Vandalism
  • Weather Damage: hail, tornado, weight of snow or ice
  • Fire or lightening
  • Water Damage from broken pipes or leaking roofs
  • Explosion
  • Aircraft and vehicles
  • Smoke
  • Riot or civil commotion
  • Falling objects
  • Freezing of plumbing systems
  • Sudden and Accidental tearing or bulging from heating or cooling systems

Renters Insurance can save your finances when a tragedy hits your home, whether you expect it or not. A bonus to having renters insurance is that it covers others who have permission to be on your property too. Say your friend is over helping you make cookies or helping you on the grill and he or she gets burnt from a fire. Renters insurance will pay for the medical bills for those who are injured on your property. In addition, it can cover the legal fees if someone decides to take you to court for those injuries. Keep in mind that the amount of your coverage is determined when you setup your policy and that higher coverage equals higher premiums. An important point is that this portion of renters insurance does not cover injuries that you or those who reside with you on the premise receive.

And that isn’t it, the coverage doesn’t stop there! You are covered even when your off of your property! Some successful renters insurance claims have been, but are not limited to:

  • Being robbed of your camera and wallet while on vacation
  • Luggage gets lost by an airline, or stolen at a hotel
  • A power outage ruins a freezer full of food
  • You accidentally hurt someone at a pick-up game in the park
  • Your car gets stolen with $400 of suits in it

As random as these may sound, they have been successful claims where the policy holder has gotten the money or coverage for their misfortunes. 9 Year Mortgage suggests that if you do have renters insurance, you should call your insurance agent whenever a misfortune occurs; you never know if they’ll cover it until you ask.

Take Inventory

You may be thinking ‘How does my insurance agent even know what I own?’ and that is a very valid question. The best way to make sure all of your personal possessions are covered by your renters insurance is to take inventory. This can be done in numerous ways. You could ask your insurance agent to come out to your home and take inventory, but sometimes that isn’t the best since they might not mark down everything you own or purchase after he/she comes. 9 Year Mortgage suggests that you take a video inventory. This could be as simple as using your video camera on your phone, just make sure that everything you own is on that video. Another method would be to use a good ol’ pen and paper; write down every item in your household. It wouldn’t be a bad idea to take a picture of the more expensive items for proof; keep receipts for them and document the serial numbers on your computers, televisions, stereo systems and so on. When taking inventory, open every drawer, scan every shelf and go into every room to ensure you have recorded every item. Don’t forget to add new purchases to your video, lists, or pictures as the year goes on and don’t forget about all the holiday gifts you receive! Once your inventory is complete, make a couple copies and store them somewhere besides your home. It would be wise to send a copy to your parents house, through your email, or have it kept in a safe deposit box in a bank.

Here are some random tid-bits about renters insurance from 9 Year Mortgage, and again, this information is typical of most policies:

  • It only pays up to $500 for things like jewelery, furs, fine arts, coin and stamp collections etc., so you might (and when I say might, I mean should) want to get additional insurance for those type of items.
  • It will pay for the food, shelter, and transportation costs that you incur if you are ever put out of your house due to one of the many inconveniences you can come upon.
  • It comes with inflation coverage! The amount of coverage will automatically increase on your personal property as inflation changes the cost of living.
  • If you are living with a roommate, get separate policies. You want your personal items to be covered 100% and you don’t want to be fastened to a roommate who is found liable for injury or damage.
  • Ask your agent if you can pay by month if your budget is tight and consider setting up your policy to renew automatically.
  • Put your agent’s phone number in your cell phone–you never know when you might need to get a hold of him or her at a moments notice.
  • You may want to consider getting “replacement” coverage rather than “actual cash value” coverage. The recliner sitting in your living room for five years has depreciated in value, and the insurance company will not give you what you paid for it if you have a cash-value policy. Having replacement coverage will allow you to buy a new recliner that is just as nice.

Many insurance companies offer optional coverage for an additional premium. 9 Year Mortgage suggests that you look into all of your insurance agents options, especially if you are a business owner. Additional coverages are, but not limited to, the following:

  • Identity Restoration (Did you know that Identity Theft is the fastest growing crime in the U.S.?)
  • Earthquake damage
  • Flood Damage
  • Increased business property
  • Incidental business liability
  • Increased liability limits

Last but not least, what renters insurance doesn’t cover

  • Damage caused by flooding
  • Injuries from equipment that requires its own individual insurance policies
  • Injuries caused by business conducted from your home
  • Earth movement including an earthquake or landslide
  • Damage caused by nuclear hazard

Next up… Flood Insurance with 9 Year Mortgage

Do not disregard this portion of information just because you don’t think you live in a flood zone. The truth is, everyone lives in a flood zone; It doesn’t matter if you live on a hill or in the valley next to a river- when a storm hits and that rain starts coming down, everyone is at risk of flooding. Can you predict how fast and how much water the ground will absorb? 9 Year Mortgage can’t, no one can actually. Floods are caused by storms, melting snow, hurricanes, water backup due to inadequate or overloaded drainage systems, and broken mains which means you don’t need to live by a body of water in order to be flooded.

A Couple Things You Should Know About Floods and Flood Insurance

Did you know that floods kill more people in the United States than any other natural disaster? How about that 25% of flooding happens in low flood risk areas? Or that property damage from flooding now totals more than $1 billion each year?  The fact is, most home owners and renters policies do not cover flood damage, which is why it is important for you to buy it. One out of every four people will experience flooding within a 30-year mortgage, so if your community participates in the National Flood Insurance Program (NFIP), it would be wise of you to take advantage of it and purchase flood insurance. The Federal Emergency Management Agency, more commonly referred to as FEMA, administers flood coverage and works with insurance agents to sell these flood policies. A flood insurance policy normally takes 30 days from the date of purchase to go into effect, so buying it when a disaster hits will not do you any good.

You may think that if you are the victim of flooding that you can receive federal disaster assistance, but that is only available if the President declares a major disaster. Even if you could  receive federal disaster assistance, the most common form is a loan that must be paid back with interest. On average, to receive one of these loans you have to have minimal damage that can be repaired quickly, and the normal award is $4,000. The other options are not much better You can get a Small Business Administration Disaster Home Loan for $50,000. This is a substantial amount of money that you can use to fix your home (maybe) but the catch is they’ll give you a 4% interest rate, meaning you’ll pay $303 monthly for 20 years. On the other hand, if you were to purchase flood insurance and get a Preferred Risk Flood Insurance Policy, rates start as low as $119 a year, which is less than $10 a month. Now doesn’t that seem much more reasonable? And if you are one of the countries one third of renters, you can insure your belongings from flooding for as little as $39 a year.

Be advised that normal flood insurance does not include coverage for the contents inside your home, unless you get a Preferred Risk Policy. Ask your agent for contents coverage so you can insure up to $100,000  of your belongings.

Because more roads, buildings, neighborhoods and parking lots are being built where forests and meadows once were, floods are becoming more severe throughout the U.S., where 60% of all natural disasters involve flooding. 9 Year Mortgage doesn’t want you to be caught in a wet mess with thousands of dollars of damage, so call your insurance agent today to see what flood insurance they can offer you.

Personal Article Policies

If you are worried about some of your personal belongings not being covered by your home owners, renters, flood or contents insurance, many insurance agents offer Personal Article Policies. Under this policy you can insure your diamond wedding ring, jewelery, furs, cameras, instruments, silver and gold ware, golf equipment, fine arts, collectibles, computer equipment and the list goes on. Anything of yours that you want to ensure is extra-covered in case of any accidents, fires, burglary, or flooding- they can do so under this policy for very cheap.

9 Year Mortgage Wraps it Up

Whether you are a home owner or a renter, there are various types of insurances that can benefit you and your family’s financial future. Don’t wait until a tragedy hits to find out that renters insurance, flood insurance, content coverage, or a personal article policy could have replaced your lost items. 9 Year Mortgage knows that home budgets are tight, but by insuring not only your home but your possessions as well against any disaster, you are insuring your ability to live a normal life through any tragedy that you may encounter. Remember that your college students, grandparents or those living in assisted care are generally not covered by any type of insurance, and that they too should have these insurances. Don’t be negligent in thinking you will never experience a fire, robbery, accident or even a flood; no one is safe from these misfortunes and it is best to be prepared when they come your way.

Making sure you are covered on all you bases is the best way to ensure a quality life for you and your family. Read another 9 Year Mortgage article on Life Insurance to find out how to protect your family’s future.

To learn more about 9 Year Mortgage, and to find out if you qualify for the 9 Year Mortgage program.  Find out how soon you could be completely debt free, including your mortgage, with the 9 Year Mortgage Financial Plan.

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