Living off campus exposes students and their possessions to different types of risks than what’s common in campus housing – damage from storms, theft, and responsibility for others. Landlords are responsible for the physical building, but not for tenants’ belongings or liability.
Many renters are unaware that they must take responsibility for their own possessions. In 2013, 96% of homeowners purchased insurance, compared to only 35% of renters, according to a poll by the Insurance Information Institute (III). As the number of renters rises each year, it’s important to be more informed about the potential risks of going without insurance.
How does it protect you?
It protects your belongings from perils such as fire, smoke, lightning, vandalism, theft, explosion, windstorm, and some types of water damage. Carriers typically exclude flood damage from renters insurance coverage – just as they do with homeowners insurance. There can be other exclusions as well.
Standard insurance typically includes liability and medical payments coverage. If someone becomes injured on your property, you could be responsible for medical treatment and other costs. Liability coverage will help if the injured person decides to sue – it can pay legal costs and any award, up to your coverage limit. Medical payments coverage can pay for treatment of someone who decides not to sue, again up to your policy limits.
Some – but not all – policies also pay for temporary housing and meals, should your rental become uninhabitable while damage from a covered event is repaired.
Do you need it on campus?
Do you need insurance if you live on campus? Typically, no. Your parents’ insurance policies can extend to protect children’s property, as long as the students still use the family home as their primary residence. Parents should double check with their agents to be sure, however.
Do you need it off campus?
Do you need insurance if you live off campus? Absolutely. Some property managment companies or property owners require proof of insurance before they’ll agree to a lease. Even if they don’t require insurance protection, you should consider purchasing it.
Insurance won’t set you back much. A standard policy typically costs $148 per year, according to the III. If you’re moving into a house with a bunch of friends, however, you will all need your own policies. Why? Renters insurance is meant for singles or families who co-own their belongings. In some states, you can add your roommate under your policy, but the National Association of Insurance Commissioners recommends that all residents have their own.
In most cases, it’s also more convenient to have your own protection. Insurance carriers gauge how much protection you need by the value of your belongings. If someone else’s belongings are added to the policy, it could cost you more.
What type should you buy?
You can choose from two types of insurance: actual cash value and replacement cost. Both will require you to pay a deductible before addressing covered claims. Actual cash value can help replace your belongings, but will take depreciation into account. Replacement cost coverage won’t consider depreciation.
What does this mean? If your 5-year-old TV is stolen from your apartment, an actual cash value policy will only pay you the amount that it was worth when it was stolen. A replacement cost policy will help you replace it with a new TV. You likely will have to pay more for replacement cost coverage.
You also can change your deductible amount to better fit your needs. Typically, a higher deductible means lower monthly payments. Remember, however, that your deductible should always be manageable. Don’t set it so high that you won’t be able to pay it.
How can I save money?
When you’re checking out a property to rent, ask about features like security systems, smoke detectors, and deadbolt locks. These three home features not only can keep you safe, but they also can lower the price of insurance. Having good credit and purchasing multiple policies (car insurance, for example) through the same carrier also could help you save.
Don’t leave the survival of your possessions up to chance. If you’re renting off-campus housing this upcoming semester, purchase renters insurance. That way, you won’t have to worry about your TV, laptop, bicycle, and other belongings while you’re out “studying” on weekend nights. With insurance, you can kick back, relax, and enjoy.
Katherine Wood is from St. Louis. She graduated from Davidson College with a bachelor’s in English. Katherine wrote an undergraduate thesis on the works of Shakespeare and attempts to bring the same romance to writing about all things related to homeowners insurance. She writes for the HomeownersInsurance.com blog.