Blog

Some renters have leases that require them to pay for insurance to live in those apartments and make the mistake of thinking they have renters insurance coverage for their belongings. That is not the case. Most times, that renters insurance only covers their liability if they do something that causes damage to the unit or building, such as causing a fire the burns down a multi-family apartment unit. In such instances, the renters insurance policy would pay up to policy limits for the cost of repairs. Any other liability, such as civil liability for any damages to other tenants’ property, might not be insured.

Many Las Vegas Renters Are Crime Victims

Las Vegas police say there are more than 5,100 property crimes reported in the area every day. And high on the list of property-crime victims are renters, whose residences are less than secure and have belongings that are vulnerable to theft. Buying a renters insurance policy is one of the most affordable types of insurance protection renters can obtain for their belongings. And the coverage is portable, which means it extends to personal belongings when away from the home. If an expensive bicycle is stolen while out running errands, the renter’s insurance policy would cover the loss minus any deductibles that might apply. And when indoor belongings are damaged or stolen, there would be coverage available to help replace them.

Renters Insurance Policies Are Affordable

For the amount of coverage provided, renters insurance policies are very affordable. Many plans cost less than $20 per month and insure personal belongings and provide liability insurance protection. The policies likely would provide market-value coverage, which means it would pay the replacement value minus any depreciation for the item in question. Scheduled amounts that predetermine the insured value of costly items, such as artwork, jewelry, silverware and other expensive items, also is available with most policies.

If you are a renter, do you have any valuables that would be costly to replace?

Property and casualty insurance policies will provide a great deal of liability protection for policyholders and named insureds. If people slip and fall, a tree falls and damages a neighbor’s car, you are at fault in an accident, or other perils, most insurance policies will pay up to coverage limits minus any deductibles that apply. Liability insurance coverage is one of the primary functions of property and casualty insurance. In fact, liability insurance by definition is casualty insurance. But there is one thing no insurance policy will insurance against: A Moral hazard.

When Negligence Becomes a Moral Hazard

A moral hazard essentially is a policyholder’s willful disregard for known problems, such as a crumbling walkway with frequent foot traffic that remains in disrepair even after complaints are lodged. If, for example, the owner of an apartment complex knew of a potentially dangerous condition caused by a crumbling walkway and chose to ignore it until it caused injury, the insurance company could declare the management to be a moral hazard and refuse to pay any insurance claims. A peril must be sudden and unexpected and not the result of policyholder neglect for the contract to be valid. Ignoring a known dangerous condition, especially if tenants complained to local authorities, easily could constitute a moral hazard and negate any coverage for damages.

Preventing Moral Hazards

If the owner of an insured property, whether it be a home, auto, business or some other type of property and casualty coverage, suddenly becomes aware of a potentially dangerous condition and takes reasonable steps to correct it. insurance coverage would apply. In the case of a damages sidewalk, once aware of the disrepair, the landowner could cordon it off or place warning signs while making plans to either fix the problem or hire someone to correct the situation. Even if injury occurred during the repair process, the policyholder initiated reasonable steps to correct the matter, so insurance coverage would apply. Ignoring the same problem for months or years could negate coverage.

Are there any potentially dangerous conditions where you live?

No matter how much money people have or what kind of occupation they do, the need for liability insurance can’t be overestimated. People who own homes and drive routinely take on potential risks that could result in very costly legal judgments against them. Homeowners and auto owners are liable for injuries or damages caused by driving or some home condition that might cause property loss for one or more people. And homes and autos are just two types of property for which their owners are held liable for losses others incur as a result of their use. Fortunately, an umbrella insurance policy is an affordable way to protect against costly legal settlements and court judgments.

Umbrella Insurance Offers Broad Liability Coverage

An umbrella insurance policy will cover the costs up to policy limits that auto insurance, homeowners insurance, commercial insurance, professional liability and others don’t due to coverage limits. The policies are affordable because of the underlying insurance coverages that handle the majority of claims people encounter. A minor car accident or damage caused by using of a home, such as a child sending a baseball through a neighbor’s picture window while playing, will be covered by auto insurance and homeowners insurance. The same goes for professional liability insurance policies, such as errors and omissions for financial advisors, insurance agents, attorneys and other professionals. But when those policies reach their coverage limits and there is a large balance owed, an umbrella insurance policy would cover those costs with many policies starting offering a minimum $1 million for very reasonable rates.

Auto Liability Easily Exceeded

Whenever driving, there is a potential to wind up liable for very costly injuries and damages to others, particularly in larger cities where there are more people and vehicles. Those who carry state minimum liability limits in Nevada and elsewhere easily can exceed their liability coverage. But an umbrella insurance policy would cover those costs as well as the legal costs of dealing with potential lawsuits and prevent a possible bankruptcy or other financial disaster.

Have you ever been at fault in an auto accident and though you might be sued?

Nearly 20 percent of vehicle owners in Nevada have no insurance coverage on their vehicles as required by state law. And when considering the number of people who drive vehicles for which they are not insured as determined by the policy, the percentage of uninsured drivers rises further, making Nevada one of the top 10 states in which motorists do not carry mandated insurance coverage. The proliferation of uninsured motorists makes it important for drivers to carry uninsured/underinsured motorist insurance to protect them against potential financial losses if involved in an accident with a driver who is not insured.

Not All Drivers Are Identified

An uninsured driver might have auto insurance in place, but if that drive cannot be found after an accident, as is the case with hit-and-run drivers, that motorist is considered to be an uninsured motorists, according to Nevada law as well as the laws in other states. And some vehicles are insured by policies that specifically name who is insured to drive a specific vehicle. If anyone else is found driving it, that motorist is an uninsured driver illegally operating a vehicle. If involved in an accident with a hit-and-run motorist or some other type of uninsured driver, all costs are borne by the victim unless there is uninsured/underinsured motorist coverage in place or collision insurance to cover the damages.

Many Motorists Are Underinsured

While uninsured motorists can be problematic, so can motorists who are driving legally but still do not have enough liability insurance coverage to pay for medical costs and damages if at fault in an accident. To drive legally in Nevada, a vehicle must have liability insurance coverage of at least $15,000 to pay for medical costs for injuries to a single person in an accident and at least $30,000 to cover the costs of injuries to more than one person. A motorist also must have at least $10,000 in liability coverage to pay for any damages to other people’s property. All of those liability limits easily can be exceeded if involved in an accident that injures one or more people and the vehicle driven is newer and worth much more than $10,000. In such situations, either higher liability limits or an umbrella policy are needed to protect the insured party.

Would $10,000 cover damages to your vehicle if it were totaled in an accident?

Not everyone needs life insurance, but it is a very important safety net for most families in the United States. Life insurance helps ensure families can continue to meet financial obligations and not suffer substantial reductions in their standards of living if there is an unfortunate accident and a family’s primary earner no longer is around. But some life insurance policies cost more than others and work differently. The simplest, most affordable and for many financial advisors the most preferable type of coverage is term life insurance, which is in effect for a set period of time and then expires if the insured individual is still alive.

Term Plans Are Very Affordable

Term life is the most affordable kind of life insurance with rates running often times a tenth or less of that for comparable levels of whole life insurance. Term life policies also do not require a medical exam because the rates are determined based on mortality tables that very accurately assess the odds of someone dying while a term life policy is in force. Those whose lives are insured through term life plans will be happy to learn information from the National Association of Insurance Commissioners indicates the insured individual outlives the term more than 90 percent of the time. A typical term lasts from between 10 years and 30 years.

Term Life Policies Protect Homes, Investments

The most common use of a term life insurance policy is to protect a home mortgage with a decreasing term life insurance policy. A decreasing term life policy is one that has a death benefit that decreases over time to reflect the decreased amount owed on a mortgage, for example. Many term life insurance policies have guaranteed renewal options and can be converted into whole life insurance, although not all term life policies offer such policy options. Many financial advisors prefer purchasing term life insurance instead of whole life insurance and using the money saved on monthly premiums to invest in higher-return investment vehicles.

If you no longer were around, would your family suffer a drastic drop in its standard of living?