DoD Policy Change Highlights Importance of Private Renters Insurance for Military Members

A change in how the Department of Defense structures Basic Allowance for Housing means that military members and families will no longer have renters insurance included in their privatized military housing in 2015, Military.com reported Jan. 22.

Previously, some military members had insurance covered by their monthly allowance.

A pair of changes to housing policy has been made. First, renters insurance, which made up about 1% of rates, was eliminated. Second, housing pay itself has been decreased 1% on average for most service members based on the 2015 National Defense Authorization Act.

But since housing allowances are determined by the zip code of a service member’s duty station, rate changes will vary across the country.

An anonymous DoD official told Military.com that the army has already issued guidelines to housing companies on how to remove renters insurance from their leases, and the department will be creating a policy handed down to Air Force, Navy and Marine Corps officials within a few weeks.

For some service members, the policy will become effective as early as March 1, but it appears that various rental companies are still investigating how best to respond to changes. Some service stations have plans to grandfather in anyone who signed a lease before Jan. 1 of this year under the old structure.

But Mike Nixon, vice president for insurance operations with Armed Forces Insurance, told Military Times Jan. 19 that too many military members assumed that either the government or their landlord would cover loss of personal belongings even before the recent policy change.

All military members should budget renters insurance into their housing costs, he said.

Basic pay will increase for most service members this year, also by about 1%, and Basic Allowance for Subsistence (a nontaxable payment military members get once monthly in order to buy food) will increase by 2.9% in 2015.