Renter's insurance and base housing Published April 7, 2015 By Malmstrom Legal Office MALMSTROM AIR FORCE BASE, Mont. -- Recently, the Department of Defense announced that it will no longer include funding for renter's insurance in basic allowance for housing (about $20 per month). As a result, privatized housing contractors like Balfour Beatty are no longer required to provide renter's insurance as part of their lease agreements. Should residents purchase their own private renter's insurance? When making that financial decision, here are some key things to consider. - Renter's insurance is not required. Insurance requires a risk assessment. If you have a large number of high dollar value items at home, it may be worth paying approximately $20 a month for insurance. - Balfour Beatty may continue to provide renter's insurance for a limited period of time. If you feel comfortable with their insurance, there may not be a need to purchase your own. - Residents may also file a claim against the Air Force for damage to property incident to service (e.g., living in on-base housing). Unlike Airmen who live off base, on-base residents can recover money from the federal government for property loss in certain circumstances. Those circumstances are discussed further below. How long will Balfour Beatty provide renter's insurance? What does their insurance cover? Balfour Beatty may continue to provide free insurance for a limited period of time, possibly up through the rest of the calendar year. Carefully review any notices on lease changes to determine if you'll still be covered. If your original lease is still in place, likely your lease mirrors the template lease found on http://malmstromfamilyhousing.com. The template language states that residents are covered up to $20,000 per eligible resident for personal property damage, and up to $100,000 for liability coverage. Residents are required to pay a $250 deductible. According to the lease, renter's insurance will cover property loss or damage caused by theft; vandalism; fire or lightening; windstorm or hail; damage caused by weight of ice, snow or sleet; water damage from plumbing or heating, ventilation and air conditioning; electrical surge damage; etc. For further information on lease terms and the Balfour Beatty's insurance policy, contact the Balfour Beatty Housing Office at 406-315-2262. When can I file an Air Force claim? The Personnel Claims Act allows the federal government to pay for personal property damage or loss that is "incident to service" (e.g., living on base). The Air Force does not necessarily have to be at fault. This is a gratuitous payment statute. The purpose of the statute was to lessen the hardships of military life by providing this claims process. However, only on-base residents can file for property damage at their homes. An Airman living off base would not be able to file a claim for damage that occurred off-base and was not incident to service. If I can file a claim with the Air Force for damage to personal property at my on-base residence, why would I need renter's insurance? Quite simply, you might get more money from private renter's insurance, but this depends very much on the circumstances and terms of the insurance policy. The maximum payment authorized under the Personnel Claims Act is generally $40,000, and there is no deductible. In general, the Claims Act permits payment for loss or damage to personal property that occurs at government quarters caused by*: - Fires, unless caused by the wrongful or negligent conduct of the claimant - Flooding due to weather conditions or burst pipes in quarters - "Unusual circumstances" such as: -Violent natural events (hurricanes, tornadoes, etc.) that are unanticipated -Storms of extreme intensity that cause damage to an unexpected degree of severity -Power surges of unusual intensity -Power outages of enough length to spoil food -Large falling tree or a significant portion of one -Uncommon infestations - Theft or vandalism Claims that are generally not payable include, but are not limited to: - Routine or regularly occurring storms - Ice and snow sliding off a roof onto a vehicle or object - Falling branches or sap settling on vehicles - Minor deficiencies in buildings What are some differences between an Air Force claim and private renter's insurance? Renter's insurance often provides liability coverage. In contrast, the Air Force generally will not protect residents from private lawsuits. For example, if a resident negligently throws a baseball which causes severe injury to a neighboring child, the resident might face a lawsuit. The lawsuit may not be successful. But if it is, private renter's insurance may save the resident a lifetime of savings. The Air Force will not. Renter's insurance may provide better depreciation rates than the federal government or may pay the replacement cost for the item. For example, if a power surge of unusual intensity causes damage to a flat screen television or computer, the renter may get more money from their insurance because the Air Force depreciates electronic items. In addition, the Air Force may have maximum payable amounts for certain items. For example, if flooding or a fire causes a resident to lose all of his or her clothing, the Air Force may pay only up to a certain amount, which may be a fraction of the clothing's total worth. Insurance may pay more. Renter's insurance may also provide more comprehensive coverage. For example, in theft cases, the Air Force may not pay a claim if the owner did not properly protect his or her property (e.g., leaving the car door unlocked and leaving out valuables in plain view) or did not properly report the theft in a timely manner. Renter's insurance companies may pay out regardless of what actions the owner did or did not take. Furthermore, the Air Force typically will only pay claims in unusual circumstances. For example, if a normal hail or windstorm causes property damage, a resident may recover money from his or her insurance company but possibly not the Air Force. If I have renter's insurance, can I still file a claim with the Air Force? Yes, but claimants are required to file with their insurance company. If they recover money from their insurance company, that amount will be deducted from their Air Force claim. In short, residents need to assess their finances and risk level when deciding if it's worth paying approximately $20 a month for private renter's insurance. If a resident's personal property isn't worth much and he or she feels the risk of personal liability is low, renter's insurance may not be necessary. If a resident owns a large number of expensive items, private insurance coverage may be worth the extra cost. For questions regarding this matter or claims, contact the Malmstrom Legal Office at 731-2878. *These are general categories of personnel claims addressed under AFI 51-502, "Personnel and Government Recovery Claims." Claimants should not rely upon this discussion to conclude whether the Air Force will or will not pay a specific claim.