11-6 Home & Renters Insurance

In this lesson, you will learn to:

● Distinguish the similarities and differences between renters and homeowners insurance
● Read the fine print of a rental insurance agreement and a homeowners insurance declaration page
● Appreciate why it is valuable to have insurance for your dwelling, regardless of whether you own or rent a home

Resources Questions
1. The average cost for a renters insurance policy is about
QUESTION OF THE DAY: What $15/month (Forbes). Why do you think that a majority of renters
1 Percent of Renters Carry a still don’t take out this form of insurance?
Renters Insurance Policy? When renting a home, you'll need an insurance policy to cover
Answer the question on the your personal belongings known as renter's insurance. ... The
first slide in the box. Then, majority of renters don't purchase renter's insurance, either
compare your answer to the because they don't think it is necessary or believe they are
covered under the landlord's policy.
answer on the second slide.
Finally, follow your teacher’s
2. What do you think are the reasons that explain the recent trend
directions on how to answer
toward more renters taking out insurance?
the follow-up questions on the Landlords don’t cover your property damages,Extends beyond
last slide. the walls of your home, Protects you from freak accidents, Does
not cover roommates, It’s generally affordable

3. What does renters insurance actually cover?

Personal property, liability and additional living expenses

4. What factors do you think determine the premium paid for a

renters insurance policy?
If you don't own that many valuable things, your premium should
be much lower because you won't require high-value coverage.
Like the location, and number of units in your building, your
premium will also be cheaper if your building has good security
features or front desk security.

Insurance 101 - Renters 1. Why would someone want to have renters' insurance if their building owner has
2 Insurance insurance?
Though less than half of renters Renters insurance covers $100,000 or more of liability. In the instant example, if
currently purchase renters
you were to cause $20,000 or $80,000 of damage to the building with an
insurance, the proportion that
do purchase it is on the rise. accidental fire, renters insurance liability would protect you up to the policy limits.
You may be wondering what
renters insurance is and how it 2. The coverage under renters insurance will cover the costs of the following items
works. Watch this video to EXCEPT:
learn more. a. Your personal belongings
b. Small alterations to the property you made at your own expense
c. Damage to the building
d. Hotel you have to stay at until your apartment can be repaired

3. Explain how liability coverage is different than the property coverage under a
renters insurance policy.
In contrast to the personal property provision of your policy, your liability
coverage does not apply to damage related to your own property. Instead, you
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for harming them or their property.

4. Why should college students have their own renters insurance policy?
If an accident occurs that keeps a student from being able to live in the dorm or
apartment while repairs take place, that student's renters insurance policy may
provide living expenses, such as the costs of meals and temporary housing.

1. What is the difference between renters insurance for the “full replacement cost”
How to Get Renters Insurance vs renters insurance for the “cash value” of your items?
3 (Apartment Hunting 3/3) The difference is that replacement cost insurance pays for the full replacement
Now that you understand the cost of your items, whereas actual cash value insurance only pays for the
fundamentals of how renters
depreciated value. With replacement cost insurance, you'll have enough money
insurance works, watch this
video that provides 8 tips for to replace your belongings.
obtaining and maintaining
renters insurance wisely. Then
answer the questions. 2. How often should you shop around for renters insurance?
Once a year

3. Give two reasons you should complete a home inventory.

Help you purchase the right amount and type of insurance.
Make filing a claim as simple as possible

1. What did the website estimate it would cost to replace all the items in your
What’s Your Stuff Worth? apartment?
4 One reason people give for $23,960
skipping renters insurance is,
“I don’t have that much stuff.
And none of it’s very nice.”
Use this interactive to 2. On the final screen, it asks how much “disposable income” you have per month.
“customize” your That’s the amount of money you’d have each month after saving/investing and
hypothetical first apartment. paying all your other required expenses (rent, loan payments, food, gas, etc.).
Then, answer the questions. Many Americans live paycheck to paycheck (with no disposable income), but let’s
assume you have $300. How long will it take you to replace EVERYTHING in your
apartment?
6 years and 7 months

3. How much does the interactive assume your renters insurance policy will cost per
month? Does this surprise you? Explain.
$12. It doesn't surprise me because there is so much stuff

4. Do you think you will get renter’s insurance as a young adult? Why or why not?
While not required otherwise, anyone renting any type of residence long-term —
be it an apartment or single-family home — should strongly consider purchasing a
renters insurance policy. For most tenants, renters insurance is an invaluable tool
to protect against potentially devastating financial consequences.

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1. How much was the average annual renters policy in 2017?
DATA CRUNCH: How Do -2.7%
5 Renters and Homeowners
Insurance Compare? 2. How much more for insurance was a homeowner paying than a renter in 2017?
What if instead of renting, $1,031
you own your own home?
You’ll need a different type of 3. Summarize how the cost of homeowners insurance has changed between 2008
policy -- homeowners and 2017.
insurance! Complete this $381
Data Crunch to learn a little
bit about how the two 4. Create a hypothesis for why homeowners insurance continues to increase
policies compare. annually while renters insurance does not.
Less people were renting places to stay at adn more people were buy places

5. In recent years, the cost for renters insurance has decreased annually. Would
you expect this trend to continue? Why or why not?
Yes because more people are buy houses instead of renting them

Homeowners Insurance 101 1. For each of the 6 coverage bundles, briefly describe what they cover:
6 (Home Shopping 4/6) a. Dwelling -- Dwelling coverage is the part of a homeowners insurance
While renters insurance policy that may help pay to rebuild or repair the physical structure of
covers two main categories your home if it's damaged by a covered hazard. Your house and
of risk, homeowners covers connected structures, such as an attached garage, are typically protected
far more. Watch this video
by dwelling coverage.
and answer the questions.

b. Other Structures -- Other structures coverage is the part of a

homeowners insurance policy that helps pay to repair or replace
structures other than your home, such as a fence, if they are damaged by
a covered risk. For instance, if a tree falls on your detached garage, other
structures coverage may help pay for repairs.

c. Personal Property -- Personal property coverage can cover your

belongings, such as furniture, clothing, sporting goods or electronics, in
the event of a covered loss – whether they get damaged at your home,
apartment or anywhere in the world.

d. Loss of Use -- Loss of use coverage, also known as additional living

expenses (ALE) insurance, or Coverage D, can help pay for the additional
costs you might incur for reasonable housing and living expenses if a
covered event makes your house temporarily uninhabitable while it's
being repaired or rebuilt.

e. Personal Liability -- Personal liability insurance is about financial

protection – for you and your family. The personal liability coverage
within your homeowners policy provides coverage to pay for claims of
bodily injury and property damage sustained by others for which you or
covered residents of your household are legally responsible.

f. Medical Payments -- Medical payments insurance, which is another

name for medical payments coverage, covers small injuries and hospital
bills, such as X-rays, ambulance rides, minor surgeries, physical therapy,
dental work and so on. It only applies to guests who are injured on your
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property, but it doesn't matter who's at fault.

2. Your homeowners policy has a premium of $150, a deductible of $5000, and a

limit of $300,000. Your home suffers $500,000 in damages.
a. How much will you pay?
200,000

b. How much will your insurance pay?

300,00

1. How long is the duration of this particular insurance policy?

Sample of Homeowners 12 months
7 Declarations Page
As you saw in the previous
video, homeowners
insurance contains varying 2. What is the total premium Joseph and Sally Jones will pay this year? What does
amounts of coverage for
that equate to per month?
your property as well as for
liability, which makes it $1,560,00
extremely important to 130,00 per month
understand the declarations
page of your policy. Watch
the video and then use the 3. Why is the Total Policy Premium (near box 4) so much lower than the Basic
sample declaration below it Premium subtotal? 699.00
to answer these questions.

4. What is the maximum amount Homeowners of America Insurance Company will

pay to rebuild or renovate the Jones’s home, if they file a valid claim?
128,400

5. What is the maximum amount the insurance company will pay to replace items
inside the Jones’s home, should they file a valid claim?
2,140

6. Do you think the Jones’s are getting a good deal on liability coverage, given the
premium they’re paying for this coverage? Why or why not?
No, because they don’t get that much covered

If a Tree Falls on Your House, 1. In short, will homeowners insurance always cover damage if a tree falls on your
8 Does Homeowners house?
Insurance Cover It? It depends. Your homeowners insurance may help pay for repairs if it damages
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your home. Remember: You'll typically have to pay your deductible before your
65 Things Your Homeowners insurance will help pay for a covered loss, and coverage limits will apply.
Insurance Covers in 2019
First, watch this brief video
about a specific question 2. Which three items in the listicle surprised you the most?
pertaining to homeowners Wind and hail, non-theft property, liability
insurance. Then skim the
listicle for interesting items
that may be covered in your
homeowners insurance
policy. Use the two resources 3. Why is it extremely important to read your homeowners insurance policy
to answer these questions. agreement carefully?
It is written so that your rights and responsibilities as well as those of the
insurance company are clearly stated. When you purchase home insurance, you
will receive a policy. You should read that policy and make certain you understand
its contents.

Exit Ticket
9 1. Select any of the items below that would be covered by a standard renters
insurance policy.
a. Your TV if it gets stolen or damaged in a burglary
b. The building’s stairwell being fixed if the railing falls off the wall
c. Medical bills for someone who sprained an ankle tripping on an
extension cord in your living room
d. Repainting exterior walls in the case of water damage

2. Why is homeowners insurance so much more expensive than renters insurance?

Simply put, homeowners insurance is more expensive than renters insurance
because it covers more property, property that is more vulnerable to perils and
property of higher value. ... Further, while renters insurance only covers your
belongings, homeowners insurance covers both your home and belongings.

3. Provide two compelling reasons it is a good idea to purchase a renters or

homeowners insurance policy.
Reasons to purchase renter's insurance include its affordability, the coverage of
losses to personal property, it might be required, it provides liability coverage, it
covers your belongings when you travel, and it may cover additional expenses.

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