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We're Playing... Stump the Renters Insurance Expert

I've been peppering [Greg]( with questions for days now. Needless to say, he is master of his domain.

Let's say I belong to a gym, and use a locker. What if someone broke into said locker and stole my iPhone. Covered?

An iPhone is a difficult item to cover. Most renters policies will have a $500 or higher deductible which would likely exceed the value of the iPhone. Additionally many renters policies will only cover for loss of items if it is actual due to theft. So that would mean it would need to be proved that the locker was actually broken into and not just left open or the phone missed placed. This slight detail is the difference between having a broad form coverage policy which only covers losses for the listed named perils on the policy and special form policy which covers everything but excluded perils (generally just earthquake and flood). The peril not included in broad form coverage is what’s called “mysterious disappearance.”

A current development to be aware of when purchasing a policy is that some now include limits for mobile electronic devices -- a direct response to the high-value of smart phones that are easily lost and stolen. Those sub-limits can be as low as $200. So if you absolutely need to have coverage for your iPhone in case it's stolen here's what you need to do: make sure your renters policy includes coverage for mobile electronic devices -- a special form of policy -- and keep a lower deductible so you can get compensated in case you do have a claim. Remember these policies are for replacement so if you lose an iPhone 3GS, don't expect to get an iPhone 5 to replace it; the company is only obligated to buy you another 3GS or the next upgrade iPhone available.

What if someone steals food from my house? Or better yet nice bottles of wine. Covered?

Aaron Rodgers belt

If you're a renter and share an apartment or house with someone and they steal your last box of Ho Hos don't expect to submit the claim to your renters insurance policy. That's not what it was meant for. But there may be some instances when you would get compensated for loss of food on your renters policy. Say for example someone broke into the apartment, smashed the place up, then decided to steal a bunch of your food. Because this would all be one claim, you would have a standard deductible of usually $500. So the insurance company would fix or replace all your damage property, and replace the stolen food. In this instance I expect the food to be the smallest portion of the loss.

But what if you happen to love wine have some very expensive bottles laying around. (I will forgo the lecture on how you spend your money for now and talk about the insurance implications.) What happens if your wine is stolen and you want to submit a claim? Any claim is going to be subject to your deductible, again most commonly $500 -- so we are talking about some pretty expensive wine, or at least a lot of it. Wine this expensive is not treated the same as a six pack of beer is; it might be considered collectible or, in some cases, irreplaceable.

So how does an insurance company replace it? Your policy requires the company to get you a new item to replace the loss of an old one. You may not be happy if your 40-year-old bottle of wine is replaced with a bottle from 2012. So wine lovers should inquire how their policies address something like this. Some will let you schedule your special bottles for an agreed-upon value, of course charging and additional fee to do so. That is the best way to cover those special bottles or two that you just can't afford to lose. You may have to shop around a while because many renters policies will not offer this endorsement. But let's face it most people spending hundreds and thousands of dollars bottles of wine are probably pretty affluent. So many high-end homeowners and renters insurance policies for the wealthy among us already account for this with special coverage built into the policy. These policies come at a higher price and are not for the common folk.

One last note, in case any you think you're smart and are going to pull fast one on the insurance company. Intentional acts are excluded as claims, so if you happen to drink a bunch your cheap wine and "mistakenly" drink your very expensive one -- don't expect to call the insurance company and submit a claim. You will get a loud and resounding no when you speak to the claims adjuster. That's why Charles Shaw and I are such good friends.

I borrow my friend’s laptop for the night in my dorm room. It gets stolen. I have renters insurance; she does not. Is it covered?

It should be covered subject to the deductible. There would need to be some proof of actual theft and not it just being lost. Also some policies have limits for portable electronic equipment so the insured should know that limit, if it is a concern. Easy one. Is that all you got? Also you're 35 -- stay out of dorm rooms.

Let's say I have a baseball signed by all the 1953 Brooklyn Dodgers, including Jackie Robinson. It’s worth $2000, $5000, or somewhere in between. What happens if it gets stolen from my apartment? How is it’s worth determined? My aunt gave it to me.

This one doesn't sound so hypothetical. A regular renters policy will cover personal property for placement coverage. This means if an item is stolen or destroyed it will be replaced with a brand-new item of like kind and quality. That creates problems when you're discussing items like unreplaceable collectibles or antiques. The baseball would generally be covered by being replaced with a brand new baseball.

The policy is basically covering the ability to use the baseball not the value of it because it's signed or collectible. Most policies have sub limit of coverage for collectible items of anywhere between 500 and thousand dollars; the Jackie Robinson baseball would fall under those limits so the max compensation recovered for the ball would be five hundred or one thousand dollars depending on your policy. The smart insurance consumer would have the ball scheduled on their policy for an additional fee, which would ensure in the case of a loss they would receive the agreed-upon value of the baseball. This is called a rider or scheduling of personal property on your policy.

What if I am traumatized by a burglary I witness in my own home. Does any type of insurance cover mental health visits that directly ensue if I don’t have health insurance?

Short answer, nothing.

Homeowners and renters policies are meant to return you to the financial condition you were at prior to a claim. In addition to protecting you from liability losses due to acts of your negligence, or injuries to others you may somehow have been responsible for. It will even pay for some medical expenses of guests in your home if they are injured on the premises even if nobody was at fault.

But if you or an immediate family member are injured or traumatized in your home or on the premises, you would have to rely on your medical insurance for counseling or medical treatment. The liability and medical portion of your homeowners policy is meant for non-members of the household, this is because you cannot sue yourself or compensate yourself for things like loss of income, or pain and suffering.

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