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How Renters Insurance Can Provide Relief from Paying House Rents during COVID-19

As the US states are reopening after lockdown, the freezing on rent payment will end soon. It means tenants who have fallen behind in their rents are facing the imminent danger of eviction. The situation has not improved for most tenants due to joblessness and a sluggish economy.

Renters InsuranceWhen the states imposed freezes on rents, they did not cancel monthly payments; instead, they delayed the payments. From June onwards, renters may have to cover rents for the past three months (April to May). 

Many renters have used up their savings, or paid rents using credit cards or taking out loans, and have accumulated debts in the process. However, millions of people in the US do not have savings to fall back on. 

A recent survey by Edison Research shows that nearly 60 percent of people in the US are unable to incur an unexpected $1,000 expense, and more than 40 percent cannot even cover a cost of $250.

Several states are coming up with financial aids in the form of rental assistance funds to help renters. In this post, we will also talk about how renters insurance allows people to get financial assistance amid this dismal financial crunch.

How Renters Insurance Can Come to Tenants’ Rescue

The COVID-19 pandemic has caused thousands of job losses, and have made life difficult for people who are living on rent. 

Despite the rent freezes in the states, the accumulated and unpaid rents will come back to haunt them once eviction restrictions are lifted. 

It makes renters quite vulnerable when it comes to housing security, and they need immediate help to pay the rent to avoid eviction.

The federal government and states have come up with various regulations on renters insurance to assist renters. Read on.

CARES Act Eviction Protection

The CARES Act was incorporated into law on March 27, 2020. The Act provides renters relief from eviction for 120 days in the case of federal housing. 

According to this Act, property owners may not serve an eviction notice to renters until July 25, 2020. Also, and the eviction notice must provide renters 30 days to leave the property (until August 24, 2020).

During this 120-day eviction moratorium, landlords may not charge their renters any late fees or penalties for paying their rent late.

Rental Housing: Under the Eviction Moratorium

The imposition of a temporary moratorium on eviction is related to any rental housing covered by the following:

  • Under the rural housing voucher program (Section 542 of the Housing Act);

  • Holds a multifamily mortgage loan or federally-backed mortgage; 

  • Falls under section 41411 of the Violence against Women Act of 1994.

CARES Act Rental Assistance: Tenant-Based

The CARES Act (Tenant-based) aims to assist renters with paying their rent by providing the Department of Housing and Urban Development (HUD) with additional funding of $17.4 billion. This funding is for rent assistance, public housing, housing vouchers, and housing for the elderly.


Read Also: Health Insurance for Senior Citizens


CARES Act Indirect Assistance

The CARES Act (Indirect Assistance) has provided $2.2 trillion to help with housing costs, although the purpose of using the money is not specified.  

Unemployment Benefits (Expanded)

People who have lost their jobs due to COVID-19 are eligible for expanded unemployment insurance. After the recipients’ regular state benefits expire, they may receive additional benefits of up to 13 weeks, including an extra $600 per week. Unemployment benefits may also cover people who are generally not eligible, including part-time employees, independent contractors, or people who are part of the gig economy.


Read Also: Getting Unemployment Insurance in the US During the COVID-19 Pandemic


List of States that have halted the eviction

  • Arizona: Eviction halted until July 22, 2020.

  • California: Eviction halted until May 31, 2020

  • Connecticut: Eviction halted until March 27, 2020.

  • Delaware: Eviction halted until April 16, 2020.

  • Hawaii: Eviction halted until April 30, 2020.

  • Illinois: Eviction halted until April 7, 2020.

  • Indiana: Eviction halted until the end of the emergency.

  • Iowa: Eviction halted until April 16, 2020.

  • Kansas: Eviction halted until May 1, 2020.

  • Kentucky: Eviction halted indefinitely.

  • Louisiana: Eviction halted indefinitely.

  • Maryland: Eviction halted until the end of the emergency.

  • Michigan: Eviction halted until April 17, 2020.

  • Maine: Eviction halted until May 1, 2020.

  • Massachusetts: Eviction halted until indefinitely.

  • New York: Eviction halted until June 24, 2020.

  • New Hampshire: Eviction halted until indefinitely.

  • New Jersey: Eviction halted until May 18, 2020.

  • North Carolina: Eviction halted until April 13, 2020.

  • Pennsylvania: Eviction halted until April 3, 2020.

  • South Carolina: Eviction halted indefinitely.

  • Texas: Eviction halted until April 19, 2020.

  • Tennessee: Eviction halted indefinitely.

  • Virginia: Eviction halted until April 6, 2020.

  • Washington: Eviction halted until June 4, 2020.

  • Wisconsin: Eviction halted until May 26, 2020.

The Way Ahead

Amid skyrocketing unemployment rate, eviction moratoriums by states have pushed back the inevitability of homelessness during the initial phase of the pandemic. However, with the restrictions are being lifted, eviction proceedings have already begun in some states. 

In this grim situation, renters should find out whether their respective states have extended the timeline of eviction moratorium, and how long it will stay. Also, check for rental assistance programs in your state or search online with “emergency rental assistance” along with your state or city name.

 

Besides these government aids, having renters insurance can provide you financial protection against theft, fire, flood, loss of belongings, etc. For more details, call us at (650) 328-1000 or fill out the online contact form, and we will get back to you shortly.

  • Jun 26, 2020
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