Mi propia casa / Home of my own Educators Guide: Determining What is Important

Renting A Home:
Renters Insurance & Moving In

Objectives for this Lesson:

Discuss Purchase of Renters Insurance
Explain Condition Verification of the Rental Unit

_* Include in partcipant's packet.

Resources for this Lesson:

Educator Guide
PDF version
View on web
PowerPoint Presentation*
Content Guide for Renters Insurance & Moving In (PDF version):
Renters Insurance
Verifying the Condition of the Rental Unit
Work Sheets (PDF version):
Household Property Inventory Work Sheet *
Property Inventory and Condition Report Work Sheet*

Key Points	For Educator: What to Say	For Learner:
Slide #1: Renting A Home:
Renters Insurance & Moving In	Introduce yourself	Participant Introductions
Slide #2: Objectives:
Discuss Purchase of Renters Insurance Explain Condition Verification of the Rental Unit	Explain: By the end of this session, you will be able to discuss purchasing renters insurance and explain condition verification of the rental unit. Let's begin by discussing renters insurance. You will need to purchase renters insurance after the lease is signed and before you move in.
Slide #3: Renters Insurance
Protects your property if damaged or stolen. Also protects against lawsuits for unintentional damage or harm you or your family may cause to others or the property. Usually covers property loss from theft, fire, windstorms, hail or smoke damage.	Explain: Renters insurance is a special type of insurance that can protect your property, such as televisions, stereos, clothing, furniture, jewelry, carpets and appliances, if damaged or stolen. Renters insurance also protects against lawsuits for unintentional damage or harm you or your family may cause to others or the property. This often is called personal liability insurance. A lease is a written and dated legal document that records the contract between the owner and the renter. It is different from a written agreement in that it is much more detailed and provides both the renter and owner details that often are not outlined in a written agreement. Most policies cover property loss from theft, fire, windstorms, hail or smoke damage.
Slide #4: Insurance Coverage
Renters insurance does NOT cover damage from floods, hurricanes or earthquakes Landlord's insurance will NOT protect renters in case of fire, theft or accident	Explain: Losses from some causes are excluded, so read the policy carefully. For example, renters insurance does not cover damage from floods, hurricanes or earthquakes. Separate policies can be purchased to cover these. Renters often think that the landlord's insurance will protect them in case of fire, theft or accident. While most landlords carry insurance, it does not pay for losses to a renter's personal property. Renters who do not have insurance on their personal property may be left with nothing in the event of damage to the rental property. Renters without liability insurance have no protection from lawsuits for any harm they may cause to others or their property. For example, if your barbecue grill starts a fire that damages or destroys the apartment building, you could be responsible for damages to the entire structure. The landlord's insurer could sue you for the amount paid to the landlord. If the landlord was uninsured, he or she may sue you directly. You also could be sued by other tenants or visitors for injuring them or damaging their property.
	Question: What other situations might you occur that would make renters insurance worth having?	Participant discussion.
	Question: Do any of you have personal stories about the benefits of having renters insurance? Difficulties of not?	Participant discussion.
Slide #5: Insurance Cost
Affected by: Amount of coverage Deductible Higher deductible = lower policy cost Kind of property coverage Cash value Replacement value	Explain: The cost of a policy is affected by three factors. One of these is the amount of coverage you buy. The more property you have, the more it will cost to cover it. A $50,000 policy will cost more than a $25,000 policy. The deductible is another factor. The deductible is the amount that you will pay before the insurance will begin to reimburse you for loss of property. In effect, you are self-insuring for small losses up to the deductible amount. (There is no deductible for liability claims.) The idea is to insure against big losses but take care of the small, occasional losses yourself. A $250 deductible is fairly common, but if you increase the deductible to $500 you can lower the cost of the policy. If you have an emergency fund as part of your money management plan, you can afford to take care of losses up to the $500 limit. Over time, the lower cost of the policy can contribute to your savings and other financial goals. The kind of property coverage you choose also will affect the cost of a policy. Actual cash value coverage is the value of the item minus depreciation for normal wear and tear. This is the standard coverage provided by policies. You can buy a policy that will provide replacement cost coverage. This will replace a loss with a comparable item at today's price. For example, a television purchased five years ago for $400 may have an actual cash value of only $50 today. Because the cost of items can rise, the replacement cost for the same television might be $500 or more today.
Slide #6: Renters Insurance
How much is enough: Create a written inventory including: Item Cost Purchase date Model Serial Number	Transition Statement: It is important to buy enough coverage to protect what you have. Renters should not underinsure just to save a little money. Explain: To figure out how much insurance you need, start by creating a written inventory.
	Question: What items in your house might you want to include on this inventory list?	Discussion: Participants suggest items that should be included on the inventory list. Instructor will create a list on the board.
	Instructor's Note: From the discussion, create a list of items on the board.
	Explain: On your inventory list, you will want to include the name of the item and its cost, purchase date, model and serial number.	Examples: Clothing Jewelry Electronic gear Books CDs Computers Furniture Appliances (if rental unit is not furnished)
	If you use a credit card for most purchases, check past statements for prices and dates. If you pay by check, consult your checkbook register or carbon check duplicates. If you do not have cost and date information, estimate the cost and purchase date. Clothing and furnishing catalogs can help in the estimating process. The total value you calculate will give you a good estimate of how much coverage to buy and can be helpful if you file a claim.
	Activity: Here is a work sheet to assist you when you take your inventory for insurance purposes.	Activity: Distribute the Household Property Inventory Work Sheet.
Slide #7: Renters Insurance
How much is enough? Inventory Support Video Photographs Keep the inventory list and supporting documents in a safe place outside the rental unit. Update the inventory list regularly.	Explain: Inventory support also can be very helpful if you file a claim. You can support the inventory with a video or photographs of your personal property. Once you have your inventory list and supporting videos or photographs of your personal property, you need to keep this information in a safe place away from the apartment. You might consider putting it in a safe at your bank. You will need to keep a copy of the inventory handy so you can update it as you buy new things and get rid of items you no longer need. Always keep your receipts for expensive items. Finally, once or twice a year, copy the updated list and make a new video or photographs as needed.
Slide #8: Finding an Insurance Company
Consider: Cost Customer Service Record Financial Strength License New Mexico Public Regulation Commission Insurance Investigation Bureau: (505) 827-4439.	Transition Statement: You now know what you need to do to protect yourself as a renter. But we also should discuss how to find a reputable insurance company. Explain: Start by asking family, friends and co-workers about companies they use. Be sure to consider factors other than cost, such as a company's customer service record and financial strength. Buy only from licensed companies and agents. To find out if agents or companies are licensed, call the New Mexico Public Regulation Commission Insurance Investigation Bureau at (505) 827-4439.
	Transition Statement: There is one other thing you need to do before moving into the rental unit. You and your landlord need to verify the condition of the rental unit.	Participant questions.
Slide #9: Comparing Insurance Policies
Consider: Compare price, coverage, exclusions and discounts from at least three different companies. Understand the amount of coverage different policies provide. Know the safety and security features of your rental unit and ask for discounts based on these features.	Explain: The price of renters insurance varies from company to company. It is a good idea to compare price, coverage, exclusions and discounts from at least three different companies. When comparing prices, be sure you understand the amount of coverage different policies provide. You may get a multiple-policy discount and save money if you buy from the company that covers your car and life insurance. Before you buy renters insurance, know the safety and security features of your unit. Ask for discounts based on these features. The unit and property should be equipped with such things as smoke and carbon monoxide detectors, fire sprinklers, escape pathways and lighted exits, emergency lighting, security systems and deadbolt locks.
	Activity: Use this Renters Insurance Comparison Work Sheet to help you determine the policy that best meets your needs.	Activity: Distribute the Renters Insurance Comparison Work Sheet
	Explain: If you would like to learn more about insurance companies and comparing insurance policies, refer to the Home-Buying Process Section. There is an entire lesson on "Insurance" available on the Home of My Own Web site. Transition Statement: Most importantly, you need to purchase insurance from a financially sound business that will be able to pay a claim if necessary.
Slide #10: Researching an Insurance Company
A.M. Best Company, Inc. 908-439-2200 http://www.ambest.com Moody's Investor Services 212-553-0300 http://www.moodys.com Standard & Poor's Insurance Ratings Services 212-438-2000 http://www.standardandpoor.com	Explain: Before purchasing insurance, check with one of the services that rate insurance companies on their financial strength. Instructor's Note: Refer participants to the companies listed on Slide #10.
	Question: Before we move on, do you have any questions about renters insurance? Transition Statement: There is one other thing you need to do before moving into the rental unit. You and your landlord need to verify the condition of the rental unit.	Participant questions
Slide #11: Verifying the Condition of the Rental Unit
Complete a Property Inventory and Condition Report to include with your rental contract. Both tenant and landlord should sign and date the document.	Explain: Some problems between landlords and tenants come from a lack of accurate records of the rental property's condition at the time the tenant moves in.
	Activity: You can minimize these problems by using a Property Inventory & Condition Report Work Sheet at the time you sign a rental contract.	Activity: Property Inventory and Condition Report Work Sheet
	Explain: Complete the report in the presence of the landlord or have it ready for a walk-through of the unit with your landlord. You and your landlord should sign and date a copy of the report. This means you both acknowledge that it represents an accurate statement of the property involved under the terms of the contract. Taking this step can help reduce the likelihood of disputes about the condition of items and increase the likelihood of the return of the security deposit when you end the lease.
Slide #12: Verifying the Condition of the Rental Unit
Copy the document at the end of the lease and use it as a move-out checklist. Both tenant and landlord should sign and date the document.	Explain: When you are ready to end the lease, make a copy of the Property Inventory & Condition Report you completed at lease signing. Use this copy as a move-out checklist. Complete the report in the presence of the landlord. Again, both of you should sign and date it with the acknowledgement that it is a correct statement about the property. This should make the return of the security deposit free of disputes. Remember, no deposit can be kept to cover normal wear and tear; however, a portion or all of it can be kept if you do not leave the unit clean. Some landlords require a cleaning deposit to cover this expense if the unit is left dirty.
Slide #13: Verifying the Condition of the Rental Unit
Videotape or photograph the appliances, systems, walls, floors, fixtures, basement, attic, storage or other buildings, front and back yards and porches. When you move out, use the Property Inventory & Condition Report Work Sheet to record the number and condition of all the things you listed during move-in, plus any items that were added under the lease during your stay.	Question: In addition to completing this work sheet, what else might you do to verify the condition of the rental unit? Instructor's Note: Bullets will appear upon a second mouse click after discussion. Explain: In addition to completing this work sheet, you could videotape or photograph the appliances and systems. Include the inside of the oven, refrigerator, cabinets and closets. Photograph the walls, floors and fixtures. Do the same for the basement, attic, storage or other buildings, front and back yards and porches. Rental deposits on houses may be more difficult to get back than those on apartments. In addition to all the interior items that must be cleaned, you must make sure that the yard, basement, and attic or other storage spaces are empty and clean, any damage to the structure is repaired, and landscaping is in order. When you move out, use the Property Inventory & Condition Report Work Sheet to record the number and condition of all the things you listed during move-in, plus any items that were added under the lease during your stay. The property condition checklist can be used for move-in and move-out inspections.	Discussion: Participants suggest other things they could do to verify the condition of a rental unit.
Slide #14: Summary
Discussed Purchase of Renters Insurance Explained Condition Verification of the Rental Unit	Explain: For many people, renting is their first experience with living on their own. You are now ready to move in and enjoy a new place. Lesson Summary: Congratulations! You have completed "Renters Insurance and Moving In" in this Renting A Home series of classes. Today we have discussed purchasing renters insurance and explained condition verification of the rental unit.
	Question: Are there any questions?	Participant questions.

Renting A Home: Renters Insurance & Moving In

Renting A Home:
Renters Insurance & Moving In