Hurricane Irma is in full throttle, evacuations are taking place and people living in the places where Irma’s heading are hoping the damage will be minimal. Hurricane Harvey just hit Houston and caused a major damage, Irma is coming to Florida now, followed by two more hurricanes. What’s happening? Unfortunately, these situations are becoming common.
Every year the media reminds us of how easily Mother Nature can change the landscape of an area or city in a matter of a few minutes. Hurricanes and tornadoes are most familiar to Americans, but earthquakes and volcanic eruptions can also wreak havoc on the environment. Man-made structures are built to withstand many of these natural events, but often, there is no escape for a home or rental complex.
35.8 million U.S. homes and rental properties are located in areas with a high or very high risk of a natural hazard or event
This represents almost $6.6 trillion in real estate value. While many of us are aware of the natural events possible in the area we call home, it can be important to know what the risk is when it comes to a specific rental or property purchase.
“There is no reason homebuyers need to be surprised with natural disaster risk information when wading through a stack of disclosures at the closing table given the widespread availability of this data online and even through mobile apps. In most cases learning about natural disaster risk will not stop a home sale, but it will help buyers make a better-informed decision about where to buy and also be prepared in terms of appropriate insurance coverage and family contingency plans depending on the type of natural disaster risks most affecting the home they end up purchasing,” said Daren Blomquist, vice president of RealtyTrac.
Thus, while a possible disaster might not turn you away from renting a particular property, knowing more about the risk factors can allow you to budget for the correct amount of insurance.
Not surprisingly, California and Florida were two of the highest risk areas, with New York, New Jersey and North Carolina rounding out the top five. Metro areas deemed high risk include New York, Los Angeles, Riverside-San Bernardino, Houston and Miami.
For renters in these areas, it is important to look at your renter’s policy and determine what is actually covered. Are any of the natural hazards prevalent in your area not included in your coverage? These natural hazard events can be even worse when a family or individual learns that it was not covered under their renters’ insurance. Therefore, take the time to see what is covered for your rental and what is not. If there is additional coverage available to fill in the gaps, consider adding it to your current policy.
Talk with your insurance agent and give them a realistic inventory list of your belongings, including all electronic ones, clothes, furniture, kitchen items and bathroom décor. It might surprise you to find that if you were to be hit by a natural event, your renters’ insurance might not be enough to replace everything you lost, particularly if you factor inflation into the picture. Evaluate if an increase in your coverage might be needed.
For those who live in areas with a high risk of fire or flood, it is also important to have a go-bag ready with important papers, changes of clothes, water, non-perishable food and money. If an evacuation is deemed necessary, you will be able to leave quickly without having to hunt for these key items. While it is impossible to determine when a natural event or hazard might occur, renters need to prepare themselves as much in advance as possible.
Protect your rental property and get Renters Insurance
Being a renter, I have been asked many times if I had renters insurance. At those times, I thought it was something similar to coverage when you are renting a car; they want you to have it, but it’s not essential (and it costs a lot!). Now, when I did some research and spoke to landlords about it, I can see why renters insurance is useful and beneficial for the renter.
Renters coverage is similar to homeowner’s insurance; it is a form of property coverage which doesn’t cover the dwelling or structure of the property (unless the renter did material improvements to the dwelling).
So what does it cover? It covers tenant’s personal property against accidents such as fire, flood, theft and vandalism. Also, it protects the tenant from liability losses resulting from liability claims (e.g. injuries which happened on the premises but were not caused by the structural problem with the property).
Nationwide renters insurance coverage at a glance:
Personal umbrella liability
Ordinance or law
Personal injury liability
Earthquake and volcanic eruption
Loss of use
When renting an apartment from medium-to-large property management firms, in many cases the rental lease agreement will have a requirement that you need to have it in order to be approved for the apartment. Renters coverage informs tenants that property management firms are not responsible or liable for their personal property. Although, it is beneficial for tenants, landlords require tenants to have coverage to protect themselves as well.
It is necessary for property managers to require renters coverage from tenants to minimize their risk if something happens to the premises. If tenant damages the premises, the property manager and even other tenants can recover against the offender’s coverage.
Renters coverage is not just something which is beneficial to have anymore; it is a requirement for any future renters. There are many companies which offer this coverage at a low cost, these are a few: