Insurance and General Consumer Tips
TRENTON, NJ – New Jersey Department of Banking and Insurance Commissioner Ken Kobylowski recently urged renters to know their rights, understand the basics of renter’s insurance, and be sure that property managers who accept funds for rental deposits and execute lease agreements on behalf of landlords are licensed by the State.
“Many times renters, particularly younger consumers, do not understand their rights,” said Commissioner Kobylowski. “They may not realize that real estate and insurance professionals must be licensed by the State; they might not recognize what they need to protect their property and avoid suffering needless financial losses and they may be generally more vulnerable to scams.”
Commissioner Kobylowski offered the following tips:
LOOK INTO RENTER’S INSURANCE
Is renter’s insurance worth it? – Consumers need to evaluate whether coverage provided is worth the monthly premium. While renter’s insurance is generally not expensive, weighing the value of a renter’s property when compared with a policy’s annual cost is an individual decision. It might not make sense for someone who has few valuables. Some policies may also cover living expenses if an apartment becomes uninhabitable following a loss. Not everyone needs renter’s insurance. For example, college students are usually covered under a parent’s homeowners policy.
Choosing a form – There are two standard policies: The Broad Form, which covers losses following fire or theft and is the most commonly bought form; and the Comprehensive Form, which may be a better choice for a renter in a storm prone area because it covers events like hurricanes.
Coverage payment – When shopping, renters will want to know if coverage pays on an Actual cash-value basis or through replacement cost. Actual cash-value factors in property depreciation, minus the deductible. Replacement cost pays for property newly purchased, minus any deductibles that apply. Replacement cost coverage entails higher premiums in exchange for a more accurate payment of lost property.
Shop around – Once the best apartment is found, make sure the individual handling the lease is licensed. Also, remember that your contents are likely not insured. Renter’s insurance is relatively inexpensive and may be worth the cost. Examine rates from several companies, being sure to compare plans providing identical coverage.
MAKE SURE YOU ARE DEALING WITH LICENSED REAL ESTATE AND INSURANCE PROFESSIONALS
Verify Licensing – Stop. Call. Confirm. Verify with the Department that the individuals and companies quoting leases and insurance coverage are licensed by the State of New Jersey by calling 1-800-446-7467 or by checking online at www.dobi.nj.gov<http://www.dobi.nj.gov/>. Also, property managers selling renters insurance should have a producer’s license issued by the State of New Jersey. Under most circumstances, a landlord’s property manager who handles funds and execute leases must carry a real estate license.
Real estate licenses are issued and maintained by the New Jersey Real Estate Commission (REC), a Division of the Department of Banking and Insurance.
Once an insurance carrier is selected, consumers should use the National Association of Insurance Commissioners’ (NAIC) Consumer Information Resource (CIS) at https://eapps.naic.org/cis/ to compare a company offering coverage to other firms in the industry using their consumer complaint ratios. “Generally, anyone who handles money and issues leases on behalf of a property owner should be licensed,” said Commissioner Kobylowski. “Also, anyone selling renter’s insurance should have a license issued by this Department. Renters should always verify that they are dealing with licensed individuals. When in doubt, ask to see a landlord’s property manager’s real estate license or contact this Department to verify a license.”
Review your policy annually – The time when an apartment lease renews is an ideal opportunity to review insurance needs. Additions to property or contents in the apartment may justify taking another look at specified limits in the policy. Some jewelry acquisitions may require additional coverage not already provided.
Flood Insurance. Flood is not a covered peril in a standard renter’s insurance policy. Renters can purchase flood coverage from the National Flood Insurance Program (NFIP), administered by FEMA. Flood insurance policies have a 30 day waiting period before going into effect. To find out more about the NFIP, consumers can go to: www.floodsmart.gov<http://www.floodsmart.gov/>.
Renting an Apartment. New Jersey law contains provisions that protect tenants.
“Anyone who has an issue that they cannot resolve with an insurance producer, an insurance carrier or a licensed real estate professional should contact this Department for assistance,” said Kobylowski. “Our mission includes protecting and educating consumers and we take that job very seriously.”
Commissioner Kobylowski also referred renters to “Renters Insurance – It’s what’s on the inside that counts” found here: www.state.nj.us/dobi/division_consumers/insurance/renters.pdf<http://www.state.nj.us/dobi/division_consumers/insurance/renters.pdf>.
Go online at www.insureuonline.org<http://www.insureuonline.org/>;
www.dobi.nj.gov<http://www.dobi.nj.gov/>; and, www.insureuonline.org/home_inventory_checklist.pdf<http://www.insureuonline.org/home_inventory_checklist.pdf>