Renter’s Insurance: Do I Need It?

Posted by admin on 12:57 pm in Apartment Life, Renter's Insurance

One of the (few) things I hated about moving out of my parents’ house and into my own place was having to learn about insurance: health insurance, car insurance, renter’s insurance, dental insurance—and the list goes on (seriously; check out Wikipedia’s list).

Fortunately for college students, universities generally make health and dental insurance pretty simple by offering plans specifically designed for their students. So I knew if anything happened to me—I’d be good to go. But what about my stuff?

What It’s For?

A landlord’s insurance only covers the building—if there’s a fire or robbery, you’ll be left high and dry. That’s where renter’s insurance comes in. Renter’s insurance covers anything from loss of property through theft or fire to someone breaking an arm at your place and filing a lawsuit; it even covers stuff stolen from your car. (The Student Insurance Group has a list of typical things covered and not covered.)

Types of Renter’s Insurance

There are two main values of renter’s insurance—current and replacement. Current value insurance repays you the current value of the stuff that’s gone (so, for example, for a $90 pair of shoes you bought three years ago, the insurance company would give you $20, the value after wear and tear). Replacement renter’s insurance, on the other hand, gives you $90 to buy a new pair of shoes that replaces the pair you had.

Student Geared, Quick and Easy

Several insurance companies specifically work with college students (see end of blog). Most offer simple and quick quotes online and one site (www.nowwhat.com) even has a game to illustrate how quickly you can lose lots of money. It took me less than five minutes at two different sites to get quotes; to cover around $5,000 worth of my stuff cost about $12 a month.

Do I Really Need It?

It’s all about perspective. Let’s say you go to college for five years—the new national average—and acquire usual college purchases: a TV, clothes, a computer, an iPod, CDs, DVDs, kitchen appliances, etc., for a total replacement value of $10,000. A policy will cost you about $200 a year; for five years, that’s a total of $1,000. If you lose everything, you’ve essentially spent $1,000 to replace $10,000 worth of stuff. Not a bad deal.

Statistics show that out of 7.7 million college students in the USA, under 500,000 are robbed a year; in 2007, there were around 1.5 million residential fires (NFPA). Using a little college algebra, you can guesstimate that about one college student out of every 16 will have to deal with a fire or theft (see calculations below). For some, that may seem like an easy risk to take. In the end, it’s about the price you’re willing to pay for peace of mind. Like all insurance, you hope to never have to use it. But if you don’t see $12 a month in terms of how many Ramen Noodles it can buy, renter’s insurance is definitely something that’s worth looking into.

NOTE: College students living on campus are generally covered under their parents’ homeowners insurance and do not need renter’s insurance to protect their things.

Renter’s Insurance Websites for College Students:
– http://www.nssinc.com
– http://www.collegestudentinsurance.com
– http://www.studentinsurancegroup.com/coverage_premium.php
– http://www.nowwhat.com

Other Renter’s Insurance Websites:
– http://www.libertymutual.com

– http://www.geico.com/getaquote/renters

– http://www.allstate.com/renters-insurance.aspx

– http://www.nationwide.com/renters-insurance.jsp

Calculations for Guesstimate
*Numbers rounded up for simplicity*
1. Number of robberies = 450,000 (500,000 is the number of victimized crimes. I took a slightly smaller number for robberies.)
2. Number of fires = 38,000 (Percentage of USA population that is students—7.7 million/305million = 2.5—multiplied by number of residential fires—2.5% x 1.5 million = 38,000. Rationalization: percent of college students in population is equivalent to percent of college student fires in population fires. In reality, this number is probably too high.)
3. 488,000 instances of theft and fire for students/7.7 million total students = 1/15.7 or 1 in 16 college students

Written by: Laura Aiuto

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