When you rent or lease, your landlord’s insurance usually only protects the building itself — not your personal belongings. If something unfortunate happens, renters insurance helps make sure you can replace your belongings, like your electronics, computers, clothing, furniture, and other valuables. Renters insurance also includes personal liability coverage in case someone is injured while visiting you and you are held liable. If your parents carry a homeowner’s policy, you should check the terms and determine what their policy will cover.
As a tenant, you can take out a renters insurance policy for about $15 to $30 a month. These policies come in two basic forms:
- Actual cash-value policies cover the value of the item at the time of loss, taking depreciation into account.
- Replacement-value policies cover the cost of replacing the lost item with a new one. (Replacement-value policies cost more, though both types are subject to the coverage limits. Some items may require extra protection)
The items you carry in your backpack alone – a laptop, iPod, cell phone, textbooks and more can easily add up to a thousand or more dollars. To have to replace them if they are stolen or destroyed could be financially disastrous. Personal property insurance protects students against theft, damage and many other causes of loss to personal property that may occur while you are at school, home, or when you studying abroad.
Property not covered includes automobiles, motorcycles, or any other type of motorized land vehicles or other conveyances or their accessories (including car stereos, GPS devices, etc.); firearms or ammunition; pharmaceuticals; artwork; antiques and collectibles. Consider purchasing additional coverage for items that may be subject to limitations, such as jewelry, fine art, stamps, furs, and gold.
Special provisions coverage for bicycles is limited to $500. Insured property in a personally-owned vehicle is covered, provided that the vehicle was locked at the time of theft and there are visible signs of forced entry into the vehicle. Insurance will cover items that are stolen or damaged in a fire, for example. It does not cover lost items.
What to do
Decide with your parents which type of coverage is best for you. It will depend on your eligibility and preferences. Read any policy carefully to find out exactly what is covered and the limits and deductibles that apply. If you need more coverage, ask whether it can be added at additional cost or at a later date.
As with any property insurance, you should take inventory of possessions ahead of time in case you need to file a claim. Attach receipts and photos for each item in the inventory and store copies of the inventory at home and at school, in case one gets lost or destroyed. When preparing an inventory for your home, create a section for items away at college.