What is Renter’s Insurance?
Renter’s Insurance is known in the insurance trade as "tenant’s homeowner’s insurance." It is sold by all the big insurance companies to renters of apartments or houses, as opposed to the owners thereof. It covers the renter from liability claims such as if the renter’s dog bites a neighbor. More importantly, it covers a renter for loss, theft, or damage to his personal property.
Should an apartment house burn down, the landlord would have regular homeowner’s insurance on the building and he would be paid. But the tenants would not be paid for their own furniture or belongings unless they had their own renter’s insurance policies.
Cost of Renter’s Insurance
In most areas renter’s insurance costs about $200 a year for a standard policy that usually pays up to $15,000 for loss, theft, or damage to one’s personal property. The $200 need not be paid in advance. Some companies require a 30-40%% down payment and will thereafter send monthly bills for the remainder. Some companies will sign you up without any down payment at all and bill you later in a monthly fashion. Take a minute though and compare renters insurance online to find the best deal before you buy from your existing agent.
Renter’s Insurance Category Limits
Renter’s insurance is sold with standard liability limits as to several categories of property. For example, loss or theft of coins or money is usually limited to $100; silverware, $1,000; guns, $1,000 to $2,000; jewelry, $1,000 to $2,000, etc. This means that if your $10,000 gold Rolex watch is stolen in a break-in, you will only be paid $1,000 to $2,000, minus the usual $100 deductible.
How to Increase the Limits
A way to increase the categorical liability limits is to purchase a "rider" to the policy (or addendum to the standard policy). Let’s say you have a coin collection worth $20,000. The normal liability limit is $100. To be fully covered, you need an additional rider to cover the other $19,900. Such a rider will likely add another $200 or so to the annual premium. These riders are sold to cover most anything and in cases where an insurance company simply will not cover a specific thing, Lloyd’s of London will.
In the case of an ordinary, standard policy with no riders, insurance companies will rarely ever want to inspect the premises or see the property items prior to selling you the insurance. But with specialized riders, they often require an inspection by way of appraisal.
Pre-Insurance Sales Inspections
In the case of an ordinary, standard policy with no riders, insurance companies will rarely ever want to inspect the premises or see the property items prior to selling you the insurance. But with specialized riders, they often require an inspection by way of appraisal. For example, if you want $20,000 in coverage for your coin collection, they’ll tell you to go to an established coin dealer for an official appraisal. What is supposed to then happen is the coin dealer examines your coins and writes up a paper stating their worth. In reality, however, the coin dealer often instructs you to simply bring in a list of your coins, especially if there are a great number of low or moderate value ones. You then run back to the insurance company with the official appraisal paper and no one at all has seen your phantom coins.
With jewelry, the appraiser will ordinarily require you to bring in the pieces because the value of jewelry is not as standardized as that of coins. This author has in the past borrowed other people’s jewelry just for these pre-insurance appraisals.
With jewelry, the appraiser will ordinarily require you to bring in the pieces because the value of jewelry is not as standardized as that of coins. This author has in the past borrowed other people’s jewelry, just for these pre-insurance appraisals.
In cases of high value items such as rare coins, stamps, and jewelry, the insurance companies will also require you to either have a safe or use a bank vault storage. This writer has several times gone to Kmart, purchased a $150 Sentry Safe, photocopied the sales receipt, waltzed into the insurance company with this proof of purchase for the safe, then returned the safe for a cash refund back to another Kmart. Other times he has actually bought the safe, sold or thrown it away, and declared the safe stolen too, in which case the insurance company will reimburse the cost of the safe also.
Staging A Burglary
It does not take a genius to stage a bogus burglary of an apartment or rental house.
It does not take a genius to stage a bogus burglary of an apartment or rental house. Once the insurance policy is in effect (usually immediately after signing up) all burglaries are covered. For quick settlement, however, there must be signs of forced entry. This means a pane of glass in a door or window broken, or chips of wood ripped away from the door near the lock where the burglar used a screwdriver or pry bar.
Anything to be reported stolen absolutely cannot be on the premises when the "crime" is reported to the police. It should be entirely removed, not only for the short duration of the very brief police investigation, but also until the entire claim is settled by the insurance company. You would not have a very successful claim if you were to, say, hide your $5,000 worth of "stolen" computer equipment in a closet, only to have an overly zealous cop or claims adjuster unexpectedly open that closet door.
It’s best to be away for a length of time from your rental home just prior to making your burglary report, the longer the better. If you say you were on a week’s vacation in Florida only to return home to discover the burglary, the police aren’t likely to go knocking on neighbors’ doors asking if they’ve seen anything in the last hour.
What The Police Will Do
Once you call the police, they will usually come by within an hour. Though detectives could respond, it usually is just two uniformed officers. They’ll look at the point of entry and at the vacant spaces where you say that certain things were before the burglars removed them. They’ll take notes as to what you claim is missing. They’ll tell you to thoroughly check your home for other missing items and call these in, or come to the police station later with a full list. (This should be done within 24 hours.) They’ll ask if you suspect who may have victimized you or if you have any enemies. They’ll sometimes ask if you have insurance and if they do, it’s better to say that, "I’m not sure
¾ I’ll have to go through my papers to see if I’m covered for this." The reason for saying that is to distract the officers from suspecting an insurance scam. The police will almost never fingerprint your apartment. That’s all phony TV bullshit. The police will return to the station and type up a police report.
Making The Insurance Claim
First thing the next business day after the burglary, you telephone the insurance company with a report of your loss. They’ll do two things: (1) Send to the police for a copy of the police report, and (2) Send you papers to fill out and return. These papers mostly consist of inventories of your claimed stolen items. They ask for a description of the item, its value, when and where did it come from, etc. If your VCR was stolen, they want to know how much it cost, where and when was it purchased, or who gave it to you.
When this author made a claim for 642 record albums and explained how he’d been purchasing them at the rate of one a week since age 14, no claims adjuster could reasonably expect the retention of receipts in such a case.
The claims adjuster likes to see receipts though these are not absolutely necessary. First, thieves usually take away those small, cheap, drawer-size, steel strongboxes and a lot of people keep their receipts inside them. Hence the receipts were stolen. Second, objects obtained by informal inheritance do not have receipts. This writer, whose very valuable antique flintlock pistol was stolen, simply explained how it came from his deceased grandmother and he had no idea where it originally came from. Third, regarding many objects, no one keeps the receipts for them anyway. Thus when this author made a claim for 642 record albums and explained how he’d been purchasing them at the rate of one a week since age 14, no claims adjuster could reasonably expect the retention of receipts in such a case. Finally, with regard to property insured by riders, they are not usually going to ask for receipts because the very fact of pre-insurance appraisal establishes proof that you owned that item.
Settlement Of The Claim
After a claims adjuster receives the police report and your claim’s papers, he will call or visit you within 30 days to settle the claim. You’ll never get the full value of what you are claiming. The adjuster will devalue things, talk about "depreciation," use any policy category limits available to him, use the deductible, and so forth. This is like buying a used car from a dealership. Eventually you will come to terms with the claims adjuster and he’ll either cut you a check on the spot or cause one to be mailed to you within a few days. In the case of the 642 record albums mentioned above, the claims adjuster finally offered $5 apiece and this sum was readily accepted.
Threatening To Sue
If a claims adjuster ever balks at paying your claim, either because you don’t have receipts or because he smells a bogus claim, then one threatens a lawsuit, by phone or letter or both. In some states one can sue for "treble damages" (triple the amount) when insurance companies engage in unfair practices such as failure to quickly settle legitimate burglary claims. Threatening to sue has always got things rolling when recalcitrant or suspicious claims adjusters were encountered by this writer.
Cancel Policy Afterwards
As soon as your claim is paid, cancel your policy because in the event of any second or subsequent claim, legitimate or not, they are going to give you a hard time. Your premium will be prorated and refunded. Now go to a different insurance company and sign up anew. In a 2-year period this writer jumped between five different insurance companies, making various claims against them all. This is not to say, however, that they do not have the ability to dig up your claims history if they get pissed off. This writer had a claim for $13,000 with a particular company, and it was about his 15th claim of an automobile or renter’s insurance nature in a three-year period. The company was balking about paying the claim and I hit them with a treble damage letter. In response, they scheduled a deposition, which is in the small print of all policies. I had to go into the insurance company and answer questions under oath before the stenographer and a lawyer epresenting the company. They confronted me with the 14 other claims and the fact that I had stated, when applying for the present renter’s policy, that I had never before had a theft claim. So at the conclusion of the deposition, I took the lawyer aside and said, "Look, I never even filled out the application for insurance. The lady who sold me the policy did, and she simply didn’t put down my claims history which I had duly told her about. Now you’ve got a good case and I’ll probably lose. But what if I win? Then you’re out $39,000. So why don’t we just settle this dispute for $5,000?" He counter-offered with $3,000 and I grabbed it. So in some cases they’ll pay even when they know they’re getting scammed, just to get rid of you.
A career or habitual insurance scammer is always going to have problems collecting never-ending settlements, as noted above. But a first time claimant is not going to have any such problems. A one time theft claim for $5,000 to $10,000 will have a near 100%% success rate.
Renter’s Insurance Claims Fraud is a great one-time windfall that anyone with a place of abode, down on their luck, can pull off within a month or two.
Therefore Renter’s Insurance Claims Fraud is a great one time windfall that anyone with a place of abode, down on their luck, can pull off within a month or two. But like other nefarious activities with a high recidivism rate, such as bad checks and bank robberies with notes, the key is to do it just once and leave it at that. :-)