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New Jersey Department
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DOBI Offers Consumers a Guide to Understanding their Homeowners and Renter's Insurance Policies
Recent disasters such as Tropical Storm Irene, the wildfires in southern New Jersey and the apartment building fire in Woodbridge all call attention to the vital role that homeowners and renter’s insurance plays in helping consumers rebuild their homes and replace their property following a loss. Unfortunately, consumers may be confused, which can prevent them from buying the insurance product that best fits their needs.
“It is extremely important that property owners or renters have the proper insurance coverage to protect their home and its contents in the event of a loss. To do that, they must first understand the basic language of the policy and know what to look for in the document, and that is not always easy,” said New Jersey Department of Banking and Insurance Acting Commissioner Ken Kobylowski.
The Acting Commissioner today offered tips to consumers to help them better understand their homeowners and renter’s insurance policies. He also referred them to: “Insuring Your Home – A Consumer Guide to Homeowners, Renters and Condominium Insurance,” which was recently revised by the Department and can be found here: http://www.state.nj.us/dobi/division_consumers/pdf/insuringyourhome.pdf
Anatomy of a Policy
An insurance company paper policy usually contains four parts:
On the Declarations Page
Homeowners and renter’s insurance premiums are set by many factors. This page helps consumers verify their carrier has accurate information and that the policy provides coverage desired. When reviewing their policies, consumers should check the following:
What Renters Should Know
Renter’s insurance varies slightly from homeowners insurance because it covers only the insured contents of a home and the insured’s personal liability. As a renter, the insured is not responsible for the structure.
On the other hand, renters should understand that their contents will not likely be covered by their landlord’s policy and not find this out after a loss occurs and their claim is denied.
“Renters do not want to find out the hard way that their valuable contents are not covered,” said Kobylowski. “When renters learn after a fire that they cannot replace their furniture, clothes and jewelry because they have not purchased renter’s insurance, it makes a difficult recovery even harder. Renters who do not have insurance now should seriously consider purchasing it.”
The contents and liability sections of a renter’s policy are generally very similar to a homeowners policy. The primary goal of a renter’s insurance policy is to adequately cover contents. Items with considerable value, like jewelry and antiques may require additional limits or endorsements to the policy.
The liability portion covers the named insured for medical expenses related to an injury sustained on the property. An umbrella policy is an option for additional coverage as necessary.
While the structural value of residential and apartment properties in the Garden State tends to be one of the highest in the nation, the average standard homeowners insurance policy is priced at around the national average, making it one of the better insurance deals in the country. New Jersey’s standard average annual homeowners premium is $865 or $72 a month. Renter’s insurance tends to be even less expensive, on average in New Jersey the annual premium is $169 or $14 per month, which is below the national average and often very affordable for the typical renter.
Keep in Mind
Homeowners and renter’s need to remember what can impact their coverage.
Create a Home Inventory
A home inventory helps consumers understand how much personal property insurance they will need to cover their contents and valuables. It also helps ease the claims filing process in the event of a loss. An inventory should include all vital information on each personal item such as name, price, date purchased, model, serial number and receipts. Photos of each article should accompany the inventory. The National Association of Insurance Commissioners has a free smartphone app that can walk a consumer through setting up a home inventory.
The iPhone version of the app is here: http://itunes.apple.com/app/myhome-scr-app-book/id414273863?mt=8 .
The Android version is here: https://play.google.com/store/apps/details?id=org.naic.scrapbook&feature=search_result .
A hard copy version of the home inventory checklist is here: http://www.insureuonline.org/home_inventory_checklist.pdf .
Once completed, share your home inventory with trusted friends, family, your insurance carrier and, if applicable, your insurance agent.
“If they haven’t already done it, homeowners and renters should take a few minutes out of their day to create a home inventory and become familiar with their homeowners or renter’s policy,” said Acting Commissioner Kobylowski. “Consumers do not want to wait for a severe loss to review their policy or to make that checklist. Renters should remember that their landlord probably does not have insurance coverage for their personal property. Renters should seriously consider buying rental insurance if they do not already have it. The cost is relatively inexpensive and well worth it following a loss.”
For more information
Visit the Department’s Website at www.dobi.nj.gov
Call the Department at 800-446-7467 or 609-292-7272.
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State of New Jersey
New Jersey Department of Banking and Insurance