Insurance Considerations of A Renter

College students are back at their home away from home and starting on another academic year.  As parents, you likely helped moved their clothes, electronics, furniture and other belongings.  Your child had a checklist of needs for their new place and you checked them off one by one.  Was insurance on the checklist?

Do you know whether your homeowner’s policy extends to their property or if they need a renters policy, maybe you think since the landlord has insurance, your child is covered? 

Your homeowner’s policy may afford your child some coverage.  For example, 10% of the personal property coverage on your homeowner’s policy may extend to a child living away at college.  If the personal property coverage on your policy is $160,000, $16,000 of coverage is allowed to be at another location.

Your landlord has insurance for structural damage to the building, and might even be protected against damage caused by tenants. However, this coverage does not extend to the renter’s personal property, nor does it offer liability protection if damage was accidentally caused to the building (e.g., a kitchen fire or a plumbing mishap).

Is renter’s insurance worth the cost?  Renter’s insurance policies can cover everything from electronics to clothing to household appliances. Just a few items could add up to thousands of dollars’ worth of merchandise that could be covered with a basic policy. The average renter’s insurance policy costs between $15 and $30 per month. Replacing all of your possessions or being liable for an accident on your rented premises will cost much more.  Think that a small space would be a smaller claim?  Since 2008, Nationwide has paid more than $184 million in renter’s insurance claims, with an average claim of nearly $4,000.

A laptop is probably one of the most valuable possessions a student owns – did you know that if you don’t schedule that equipment, the laptop is subject to the policy deductible?  This means that you’re probably going to pay most of the cost of a new laptop out of pocket, with no coverage.  By scheduling the laptop, you will pay some additional premium (perhaps $30 annually, depending on the value of the laptop) but add it to the policy in such a way that there’s a lower deductible for the laptop, sometimes as low as $100.  A small cost for potentially huge savings in the event of a loss.

How much renter’s insurance do you need? 

Talk to your insurance agent about the property you want to protect and the property hazards you would like to be insured from.  Your agent will be able to help answer the following questions:

•    If your insurance plan affects your roommate(s)
•    What optional coverage might be available to you
•    How much liability coverage is included in your plan

Can you get a discount on renters insurance if your residence has particular safety features, like a burglar alarm? 

Many companies offer discounts if you have fire or burglar alarms, fire extinguishers, sprinkler systems and/or deadbolts on exterior doors. Some companies might also offer discounts if you have more than one policy with them. Be sure to ask about any discount you might be entitled to.

Could owning a pet cause your premium to be higher? 

Certain breeds of pets may limit your ability to get coverage through some insurance companies.  Talk about your options and how they might affect your premium costs with your agent.

Is personal liability included? 

A renter’s insurance policy covers your property and your personal liability for injuries to others and/or their property while they are on your property.

Will you receive additional living expenses if you have to live somewhere else while your apartment is being repaired? 

If there is damage to the building you are renting and you must live elsewhere while the building is being repaired, you will have coverage for additional living expenses incurred during the reconstruction period.

Sources: NAIC and Nationwide