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7 Instances When Renter's Insurance Can Really Save You

LearnVest.com — 2013-05-15T08:00:00 00:00

By Allison Kade

As many Northeasterners learned from Hurricane Sandy, a natural disaster can strip you of your worldly belongings without warning. Similar lessons have recently resounded all around the country, from wildfires in Colorado to major blizzards in the Midwest. And many renters are unprepared.

Generally speaking, your landlord's insurance will cover repairs to the property, but not your belongings or the cost of living elsewhere if you have to leave during repairs. (Your landlord is only responsible to you if he was aware of unsafe conditions and didn't fix them in a reasonable time frame.) For roughly $300 a year, however, a basic renter's insurance policy will cover about $50,000 in property damage. As with all insurance policies, renter's insurance covers certain things and not others. We spoke to real people who benefited from renter's insurance to learn what they were most grateful for. Here are seven times you need renter's insurance:

1. When There's a Disaster

Renter's insurance will cover property damage caused by fire, smoke, windstorms, lightning, explosions, electrical surges, snowstorms and certain kinds of water damage. It's tempting to think you don't have anything valuable enough to require insuring, but think about all the little things. How much would it cost to replace your dining room table? Your microwave? Your bed? Your work wardrobe? Your winter boots?

In the final year of her MD/PhD program, Christine Tsien Silvers moved to a temporary place and stored 80% of her belongings in her basement. When nobody was home, a washer hose broke, resulting in 12 or more inches of water in the basement. "My renter's insurance covered the replacement cost of all my things that got ruined," Silvers says. To gain a sense of how much all your items are worth, play around with this home inventory tool.

2. When Someone Breaks Into Your House

Standard renter's insurance policies also cover your belongings in case of theft. When Beth Lacey Gill first bought renter's insurance, she says, "I felt like it was wasted money." But then, when someone broke into her house and stole her laptop, TiVo, camera equipment and jewelry, she says, "I was so lucky I had it." Her insurance company covered a portion of the damage immediately and paid the remaining costs after she bought replacement items, including a new laptop with all the software it needed.

To make things easier on yourself down the road, take photos of any expensive items, like a TV or computer, to use later as evidence.

3. When Someone Vandalizes Your Place

Whether a burglar smashes things or an estranged lover breaks into your home and wrecks all your belongings, renter's insurance will typically help you cover the cost of items damaged by vandalism.

4. When Someone Steals Your Stuff ... Even Away From Home

Your belongings aren't only protected in your home, but also if they get stolen outside the house. Krista Van Lewen had two expensive bikes and some stereo equipment stolen from a garage and a storage room in San Francisco. "I was thrilled to only have a $100 deductible in order to replace that [$1,500] bike," she says.

The same thing happened to Carl Hultgren, an avid cyclist. Both of his bikes were stolen from his business, and renter's insurance covered them both. "I went through a pretty simple process and within a month, I got a check for $9,000," he says. "I am very thankful that my wife added the insurance to her auto policy!"

5. When You Have to Stay Elsewhere While Your Home Is Being Fixed

Where are you supposed to go if your place is no longer livable during repairs? Renter's insurance will generally cover your housing costs if your rental unit is damaged and you have to live elsewhere in the meantime.

In 2007, Barbara Adolph was renting a cabin that was struck by a fast-moving forest fire in California. "My place did not burn, but I was evacuated for days and had lots of smoke and soot damage," she says. "Renter's insurance was great and paid for my out-of-pocket expenses and to clean my place."

6. When Someone Hurts Himself at Your House

Renter's insurance can cover your legal liability, as well. If someone gets injured at your home, your policy will likely cover the claimant's medical expenses and costs from any resulting lawsuits. Generally, renter's insurance will cover your legal expenses and any court reward up to $100,000.

Jim Angleton was helping his daughters move into their first post-college apartment in Tallahassee, Fla., and their renter's insurance was already in effect. The apartment didn't have an elevator, so they had to get everything up two flights of stairs. When he helped his daughter move a cabinet, he says, "she lost her grip and the entire piece began to rest upon me." As a result of the weight, Angleton clenched his teeth and heard a pop. His tooth was split in half and he had to have emergency oral surgery. His medical costs were $7,500, but he was 100 percent covered under the accidental medical coverage of his daughters' renter's insurance policy.

7. When You Damage Someone Else's Property

The liability protection doesn't end with what happens in your home. Your policy covers you if you damage other people's property -- like, for example, if you break a neighbor's window while playing baseball in the street.

Now read about seven renter's insurance loopholes you should know about at LearnVest.com.

See more on LearnVest.com:
How One Woman Created a Zero-Waste Home
Should I Stay or Should I Go? Expert Tips on Home Selling
How an Energy Audit Saved Us $2,400 a Year

More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Find homes for rent.

Follow us on Twitter at @AOLRealEstate or connect with AOL Real Estate on Facebook.

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How One Woman Created a Zero-Waste Home

LearnVest.com — 2013-04-22T16:30:00 00:00

Filed under: News,How To

By Lisa M. Gerry

Five years ago, Bea Johnson and her husband and two sons (all pictured above) were looking for a home closer to the restaurants, shops and school in their coastal California town. During the year they spent house hunting, the family of four moved into a small apartment, took only the possessions that were absolutely necessary and left the rest in storage. "After living with just the necessities, we realized that we had much more time to spend with our family when we weren't spending it caring for a large house and lots of belongings," says Johnson.

Then, when they did decide on a house, they chose one that was half the size of their previous home and simplified by selling most of their old stuff. Around that time, Johnson and her husband began investigating environmental issues. "We read books, watched documentaries, and what we learned worried us and made us sad for our kids' futures," she says. "So we decided to do something about it. My husband quit his job to start a sustainability consulting company, and I tackled greening our house."

It was then that Johnson devised a system to reduce the family's garbage: She calls it the Zero Waste Home. She started by swapping everything disposable in their home (paper towels, water bottles, grocery bags) for reusables. Today, she says, her family's yearly waste can fit in a quart-size jar (pictured at left). She spoke with us about how to get started, her zero-waste strategies and the one sustainable habit she's just not down with.

Was there something you read or saw that you modeled your Zero Waste Home after?

No. Actually, there were no blogs or really anything about being zero waste, so I had to test everything for myself -- I did a lot of Googling. Today, the zero-waste lifestyle is easy for us -- we don't even think about it. But [when we were getting started], we had to experiment to find what our limitations were.

What are the basic tenets of the zero-waste lifestyle?

What we do is based on what we call "The Five R's," which should be applied in order.

1. Refuse whatever we do not need. For example, junk mail and freebies.

2. Reduce what we do need by donating or selling anything that isn't absolutely necessary for us to live comfortably.

3. Reuse by buying second-hand, swapping disposable items for reusable items, and shopping with reusable packaging.

4. Recycle. By this point, if you've applied the first three R's, you should be left with very little recycling. For example, what's left in our recycling bin are bottles of wine that friends bring over and papers sent home from our sons' school.

5. Rot. Compost anything that can be composted.

How did your sons react to the change in your lifestyle?

Our sons [ages 13 and 11] didn't even know we were doing zero waste until we pointed it out to them. To them, what we do is totally normal. And, the kids have really enjoyed the simplicity aspect of the lifestyle. It clears their heads, keeps them focused, and they say it's much easier to clean their rooms.

What is your process for grocery shopping?

For my weekly grocery run, I bring what I call my shopping kit: three totes, five glass jars (one each for meat, fish, solid cheese, grated cheese and deli meat for the kids' lunches), two different sizes of cloth bags for dried bulk goods and mesh bags for produce. I buy olive oil, honey, peanut butter, cereal, snacks -- almost everything -- from the bulk section in our grocery store where the items are unpackaged. I buy grated cheese from the salad bar and, every week, I ask for 10 baguettes unpackaged from the bakery. I put them in a pillowcase and then cut them in half, freeze them and then thaw them out as we need them. The produce section is also great for unpackaged foods. The only food that my family eats with disposable packaging is butter -- that's it. We tried making our own butter, but we found that it was not a sustainable option for us.

Read the rest of Johnson's story on LearnVest.com.

See more on LearnVest.com:
6 Ways to Save Money by Going Green
How an Energy Audit Saved Us $2,400 a Year
8 Ways to Inexpensively Revamp Your Home

More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
See celebrity real estate.

Follow us on Twitter at @AOLRealEstate or connect with AOL Real Estate on Facebook.

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7 Top Mistakes People Make When Shopping for a Mortgage

LearnVest.com — 2013-04-05T10:45:00 00:00

Filed under: News

By Kate Ashford

Buying a home is one of the biggest decisions you can make, and it's likely the largest purchase you will ever make. So it's no surprise that there are multiple ways you can trip up. Getting a mortgage is about more than having your offer accepted and signing on the dotted line. (Or hundreds of dotted lines, which is what it feels like at the closing table.) Here, our experts reveal the top seven landmines in the mortgage process and how to avoid them.

1. Neglecting to check your credit before starting the process.

Approaching mortgage lenders without having some idea where your credit lies is like going to an important job interview without checking for spinach in your teeth. "I'm amazed at people who apply for a mortgage and they're shocked at things on their credit report," says LearnVest Planning Services certified financial planner Ellen Derrick. "They say, 'I had no idea that I forgot to pay my Best Buy card!'"

Mortgage lenders are going to go through your credit report with a fine-toothed comb, and they're going to make decisions based on how creditworthy you appear to be, including whether to offer you a loan at all ... or at what rates. If you don't check your credit score first, you stand to lose money, or your potential dream home.

What to do instead: Ideally, you'll check your credit well before you begin hunting for a home, and work to increase your score if you need to, or dispute errors on your report, since those can take time to rectify. You're entitled to a free credit report from each of the three bureaus (Experian, Equifax and TransUnion) once a year, and you can pull those from AnnualCreditReport.com. If there are errors, fix them. (Some examples: Any accounts listed that aren't yours, accounts incorrectly listed as being in collections, incorrect large balances reported, or incorrect late payments reported.) The bureaus have 30 to 45 days to investigate the issue and fix it accordingly. Use free resources, like Credit Karma or Credit Sesame, to get an estimate of your credit score for TransUnion and Experian. If you want to see your actual FICO scores for each credit bureau, buy them outright (about $15 to $20 each) instead of committing to unnecessary and expensive monitoring when you sign up for a free trial.

2. Applying for new credit simultaneously.

When you're applying for a mortgage, your credit is under serious scrutiny. Apply for a new credit card and your credit score will dip temporarily due to the application credit check, which counts as a hard inquiry on your account for about 12 months. The same goes for closing an old account -- it will affect the amount of credit you have available, which will negatively affect your score. (Note: For car or home loans, all credit inquiries made within about two weeks of each other count as one inquiry, so when you're shopping around for mortgage brokers, be sure to submit all of your loan applications around the same time.)

What to do instead: While applying for a mortgage, hold off on opening up a Macy's store card or applying for a car loan. "You really have to watch where you step in terms of your credit," says Greg McBride, senior financial analyst at Bankrate.com. "You don't want to open up any lines of credit and you don't want to close any out. Just keep doing what you've been doing." And of course, continue making on-time payments and chipping away at any debt.

See five more top mortgage-shopping mistakes to avoid at LearnVest.com.

See more on LearnVest:
Spring Cleaning: When Is (and Isn't) a Task Worth Your Time?
8 Top Home-Selling Mistakes People Often Make
7 Top Home-Buying Mistakes People Often Make

More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Find homes for rent in your area.

Follow us on Twitter at @AOLRealEstate or connect with AOL Real Estate on Facebook.

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10 Quick DIY Projects You Should Do This Weekend

LearnVest.com — 2013-03-27T08:00:00 00:00

Filed under: Design,News,Home Improvement

By Libby Kane

Springtime brings bugs: D.I.Y. bugs, to be exact. And if done right, D.I.Y. can be an affordable way to refresh your home. There's just one caveat: Doing things yourself takes time -- and patience. There's the planning, the research, the scavenging for materials, the first coat of paint, the second coat of paint ...

Knowing that your patience could wear out long before that paint dries, we've found the perfect compromise: 10 projects from around the web that are cheap (you'll be using things that you already have) and quick. You can knock each of these projects off in under an hour.

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See more on LearnVest.com:
House Damaged in Natural Disaster? Claim Your Loss
Waterfront Housing: Is the Risk Worth It?
Spring Cleaning: When Is (and Isn't) a Task Worth Your Time?

More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
See celebrity real estate.

Follow us on Twitter at @AOLRealEstate or connect with AOL Real Estate on Facebook.

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What I Wish I Had Known When I Bought a House at 21

LearnVest.com — 2013-03-15T12:00:00 00:00

Filed under: News,Buying

By Sophia Bera

I've been told my whole life that I'm so young. I skipped third grade, and I'm an only child, so I'm used to doing things before my time. When I bought a house at the age of 21, everyone was shocked -- but I'd been planning it for a few years. Even from a young age, I've tried to be thoughtful about money.

Before I had any idea what a certified financial planner was, I read Smart Women Finish Rich by David Bach. I was a theater major in college, and I was determined not to become a starving artist. So I started my Roth IRA at the age of 18, convinced that I needed to buy a house when I graduated from college. The problem? While I was in college, I kept watching real estate prices go up, up and up.

My plan was to buy a one-bedroom condo, but my dad convinced me that I should at least have a yard and a garage. I ended up putting in an offer on a one-bedroom, one-bath home with a 2½-car garage. I had lovely gardens, a fenced-in backyard, and the basement was partially finished, so I was able to turn that into a second bedroom. I often joked that I had the smallest house on the block -- with the biggest garage.

What It Was Worth Then ... and What It's Worth Now

I bought my house in 2005 for $189,000. In retrospect, I shouldn't have taken out a mortgage that big. I was only making $32,000 a year, so I could only afford half of that! My then-boyfriend, now-husband was living with me, so we made it work.

It seemed like such a good idea at the time, but then the housing market crashed and things started to go down, down, down. The part of the city where I was living was nice, but as the economy started to tank, crime went up. My neighbor got jumped, and another one had his house broken into. I'm a city girl who never thought I'd want to move to the suburbs, but even I was ready to call it quits. According to Zillow.com, at the height of the real estate market, my house was valued at $239,000; about a year ago, it had dipped to around $130,000.

Trying to Get Out

We were underwater on our home. Although we were willing to take a loss of up to $30,000, we just didn't like the thought of it. After stressing over what to do, we heard that a friend of a friend needed a dog-friendly place to rent. The stars had aligned.

We rented our house for roughly our monthly mortgage payment and our tenant signed a two-year lease. We agreed to pay the water/trash bill, so we are out about $100 a month. But that still feels a lot better than losing thousands at one time!

In the meantime, we moved in with one of my husband's friends for a year, renting the upstairs of their big, beautiful house in the suburbs. A few months ago, we moved in with my in-laws; his mom was retiring, so paying rent would help them out financially, too. We are actually very happy living with my in-laws, which surprises a lot of people. Living with family isn't a big deal for us -- it's more important to keep our fixed costs low and save for retirement and another eventual down payment.

Keep reading at LearnVest: What I Learned From All This

See more on LearnVest:
Spring Cleaning: When Is (and Isn't) a Task Worth Your Time?
8 Top Home-Selling Mistakes People Often Make
7 Top Home-Buying Mistakes People Often Make

More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Find homes for rent in your area.

Follow us on Twitter at @AOLRealEstate or connect with AOL Real Estate on Facebook.

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Hurricane Sandy Rebuilding: 3 Bold Ways to Restore Cities Hit Hard

LearnVest.com — 2012-11-13T11:06:00 00:00

Filed under: Design,News,Home Improvement

By Jessica Kraft

Hurricane Sandy's horrific destruction will cost an estimated $60 billion in property damages and lost business. But one silver lining may be the opportunity to rebuild New York and New Jersey to not only withstand the next hurricane, but to also create jobs, spur the economy and save the government a lot of money in the next storm.

Organizations like Architecture for Humanity and Global Green are proposing to rebuild devastated areas with smarter designs, and The New York Times covered three innovative ideas by design and engineering firms for rebuilding after Sandy. As New York Gov. Andrew Cuomo said last week after the storm hit: "I'm hopeful that not only will we rebuild this city and metropolitan area, but we use this as an opportunity to build it back smarter."

But what does building a smarter city mean, exactly? And how much would such designs cost? Would investing in them be less than the cost of potential damages? We look at some potential proposals and weigh their costs and benefits.

A Smart Grid

Nearly 8 million people lost electrical power to their homes and businesses as a result of the storm's damage. In its current state, our electrical grid relies on fossil-fuel-burning power plants that serve very large areas. This setup is both extremely wasteful (8 percent of electricity is lost on average during long-distance transmission) and highly vulnerable. For example, sending out power through overhead distribution lines is just a disaster waiting to happen -- those high-voltage wires should be buried wherever possible.

And the grid is also what New York Times columnist Thomas L. Friedman calls "dumb," meaning it doesn't have sensors at local sites that would sound the alert when there are outages. Power companies generally identify problems by getting a phone call from a customer who is sitting in the dark. Friedman also says the grid is dumb because it doesn't know how much power is needed at any given spot, so it sends out the maximum amount of electricity everywhere all the time -- another source of massive energy waste.

Related: See Some of the Most Sustainable Communities in the World

By contrast, a smart grid, which is in development in American cities such as Austin, Texas, and Boulder, Colo., and already exists all over Europe, is a communications system. Smart meters installed at every home and business are able to relay their power demand, or lack of power, instantly to the power company, and the company can provide varying electrical flow to different sites based on demand.

A smart grid can thus automatically detect problems in a distribution system and isolate them before they spread or cause fires. Since smart grid software handles most of these interactions, human error and outages are decreased, response times are increased and prices accurately reflect different rates of power consumption. Smart grids would have restored power much faster during Sandy, especially to areas affected only by storm-ravaged transmission lines.

Is It Worth It?

No doubt about it, the smart grid is enormously expensive. Establishing a national system over the next 20 years would cost at least $100 billion according to U.S. Energy Secretary Steven Chu. But if it eliminated power outages and responded intelligently to customer demand, the Electric Power Research Institute estimates that a smart grid could actually save $100 billion each year. And the cost of a smart meter for an individual property is only $250. Just starting with smart meters in storm-prone areas could prevent or shorten the type of blackouts we've seen due to Sandy.

Ecological Drainage

Much of the flooding damage that resulted from the maelstrom was a result of impermeable infrastructure. When water hits solid asphalt, cement or metal surfaces in our cities today, it travels quickly to the lowest elevation along linear designated pathways: streets, storm drains, subway channels, culverts, drain pipes. But these conduits soon become inundated and overpowered with excessive volume. The opposite is true in nature: flowing or falling water gets absorbed into the ground where it falls, or it is sent in meandering channels so that it covers more surface area and disperses its energy. Flooding is delayed until after all other absorptive surfaces have been saturated. So installing permeable pavement is a way to help cities mimic nature, by allowing water to soak into the ground locally.

Constructed wetlands and bioswales, which are simple ditches filled with stones and plants, would also mitigate flood damage in low-elevation areas near bodies of water. Wetlands and swales offer a natural barrier that forces oncoming water to run over different textures of absorptive surfaces. This slows down floods, filters out pollutants and protects bordering areas from the blunt impact of a wall of water.

If the Jersey Shore and the shorelines of Long Island and even Manhattan had had these features bordering residential areas, much serious flood damage could have been avoided.

Is It Worth It?

Permeable paving is at least two times as expensive to install than conventional asphalt, but the cost is immediately offset by a reduction in stormwater hardware that includes drains, reinforced concrete pipes, catch basins, outfalls and stormwater connects. When these total costs of managing stormwater are included, an asphalt or concrete paving system costs between $9.50 and $11.50 per square foot, whereas permeable systems cost $4.50 to $6.50 per square foot.

These savings also apply to bioswales, which a 2004 Army Corps of Engineers study found to be much less expensive to install than underground stormwater systems. So replacing concrete water barriers with more natural solutions not only mitigates storm impacts, but it saves lots of money. And since looking at a vegetated landscape is much more pleasant than touring a storm drain, it's likely that ecological drainage areas could become profitable tourist destinations if combined with other amenities.

By the way, scientists are now proposing that movable seawalls be built around Manhattan, but even with these walls, runoff, storm water and rainfall would still encroach on the city, making absorption and diversion measures necessary.

Green Building

As winter approaches, those still without power in their homes are getting colder and colder. But is this because their houses are not properly weatherized? Writing in the aftermath of the storm, Alex Wilson, executive editor of Environmental Building News and an advocate for the emerging field of "resilient design," proposed: "By building or retrofitting to achieve resilient design, we can create homes that will never drop below 45 to 50 degrees Fahrenheit even if the house is totally cut off from power and heating fuel -- they can do that with high levels of insulation, top-performing windows, passive solar gain, and other features."

In general, the current guidelines for green buildings specified by the USGBC's LEED rating system (Leadership in Energy and Environmental Design) double as disaster prevention measures that we should incorporate in rebuilding efforts. Green buildings that generate their own clean energy with solar panels or wind turbines, process their own waste and water, and even produce food on-site would have provided great shelter during Hurricane Sandy with minimal disruption to normal life. Instead of having millions of people dependent on the same central energy, food and water delivery systems that fail outright during a crisis, each building, block or locality could provide these necessities, which would keep more people and businesses functioning.

Is It Worth It?

In a report by the Massachusetts Technology Collaborative for the State of California Sustainable Building Task Force, green buildings were found to cost 2 percent more upfront on average. However, the energy and materials savings over the lifetime of the building were found to be 20 percent of conventional costs. So implementing green building on a large scale with creative upfront financing would yield more than 10 times the initial investment over the lifecycle of the building.

Future Storm Protection, at Cheaper Cost

With Sandy, we've learned the hard way that our centralized power grid, concrete jungles and fossil-fuel dependent buildings just make terrible storms even worse. Learning to work with nature and our changing climate by focusing our rebuilding efforts on distributed, locally based, green solutions could help reduce the damage of such storms and also save us a lot of money. Now that would be smart.

See more from LearnVest.com:
Should You Accept Short-Term Loans and Credit Increases After Sandy?
True Stories: What Hurricane Sandy Taught Me About Money
4 Steps to Budgeting for the Holidays Now

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More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Find homes for rent in your area.

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