After the cost of tuition and books, a lot of college students may not be so eager to spend even more money to buy renters’ insurance. This might, usually, be a mistake.
For a student living on-campus, they’re not probably worried about renters insurance. That is if their parents’ homeowner’s policy will cover any loss or damage to personal items. But, verify if the parents’ policy does include “off-premises coverage”. It’s not guaranteed.
But, the student is on his own if he lives off-campus. When renting, a tenant’s property is not normally protected by the landlord’s insurance. The landlord protects their building and business, not the renter. Maybe your roommate has renters insurance? Sorry, his insurance doesn’t cover other people’s property.
Keep in mind, a lot of apartment complexes require you to have renters insurance.
Okay, so what is covered by renters insurance anyway?
Renters insurance would usually cover three things:
1. Personal possessions. Your personal property gets replaced if it’s damaged or lost. Normally, you’ll be covered for loss due to fire, theft, vandalism, and a few other causes. Be sure to check the details of your policy.
* Have you considered the cost and trouble it would take to replace all of your personal possessions if you didn’t have renter’s insurance?
2. Liability protection. Renters insurance could cover you for things like: protect you if your dog were to bite someone, or if someone gets hurt because they slipped on your stairs.
* This liability coverage usually covers medical expenses, and may also cover your legal expenses. In some cases, a broken leg could cost you close to $400,000. Having this liability coverage could literally save you from financial ruin.
3. Additional living expenses. This coverage will usually cover the cost of a hotel or temporary rental until your current place is repaired should your rental space be destroyed by a fire or a storm. Where would you stay if your rental space is destroyed? Insurance could help.
Remember the following when shopping for renters insurance:
Renters insurance doesn’t cost much. It can be usually less than $200 per year. As with any insurance though, your price would depend on the amount of coverage you want, the size of the property, and location.
1. Call a local independent insurance agency. They can do the shopping, so you don’t have to. They have quicker, deeper access to the insurance markets than you do. And, the agents have insider knowledge of insurance due to their experience and education. They will save you a lot of trouble.
2. Inventory personal items. You’ll need to know the approximate value of your items that need to be insured. You can save yourself some hassle if you have a list, photographs, or capture a video of your belongings. Once you complete the inventory, keep it in a safe place away from your rental space. By doing this, you will have proof of what you own.
* Having proof makes it’s easier to get reimbursed when you can actually show that you own what you claim to own. Suppose you claim that your $3,000 TV was stolen from your apartment. The insurance company is going to ask for proof that you really did own that item, right.
3. Replacement costs and actual cash value are not the same! Make sure your policy will pay to buy a brand new item. Some policies only cover the actual, depreciated cash value of the item.
* Consider this: Somehow your not-so-new couch gets destroyed. What if only the actual cash value is covered? You might only get $50. However, if you’re covered for the replacement cost, then you could get a brand new couch instead.
4. Compare the deductibles of each potential policy. People often ignore this particular factor when shopping for a renters insurance policy. It could be possible that the deductible is more than the value of all of your personal property inside of your apartment. If so, move on to the next potential policy.
5. What are your payment options. Most insurance companies will allow you to pay monthly or quarterly. But, they may charge you a fee for that convenience. Keep in mind, it’s usually less expensive if you pay the entire year in advance.
6. Familiarize yourself with the claim procedures. Not all insurance carriers are created equal when it comes time to pay out money to you. Ask around and do some online research about the insurance carriers that you’re considering. This is where that independent insurance agent comes in handy again. They will help you with the claim process. And, they’ve already researched various insurance companies for you.
Here’s the bottom line:
For most college students (or any other renter), renters insurance is simply good sense. For the protection provided, your cost can be fairly small. You take a risk by not having current renters insurance. Do you have the spare money to replace all of your property at once?
Inventory all of your personal property thoroughly, and then decide if the cost of an insurance policy makes sense for you. If you happen to have an unexpected catastrophe (life happens), then you’ll be glad you have it.