Last fall, senior journalism major Stacey McFarlane and her housemates held a party to celebrate their roommate’s 22nd birthday. They strung decorations across the walls, placed a tapped keg in the kitchen closet and shielded every entryway with “no minors allowed” signs.
McFarlane and her roommates took every precaution to throw a safe college party. By 11 p.m., party-goers filled the first floor and spilled onto the back porch. Everyone was having a great time.
But McFarlane’s fun was cut short when she realized her flat-screen computer monitor and her entire CD collection had been stolen during the festivities. The items amounted to nearly a thousand dollars’ worth of property, and because she didn’t have insurance, McFarlane is still trying to replace them.
This kind of situation could happen to anyone, as most students do not have their belongings insured. In fact, many students might not know renter’s insurance exists.
Education major Emily Bolles, a renter for three years, never considered renter’s insurance and was not even sure what the term implied. Many student renters assume their parents’ or landlord’s insurance will cover them when the unforeseen occurs. The reality is that unless students live in the residence halls where their parents’ insurance will protect their items from theft or damage, student renters are left uninsured.
As a college student on a budget, Bolles said if she was considering renter’s
insurance, “it would depend on how much it cost.”
Renter’s insurance is fairly inexpensive. Jim Rodeen of Jim Rodeen Insurance said $100 per year will cover everything inside a residence, or up to $25,000 worth of items. This way, for example, tenants will be covered if their house or apartment burns down. While a landlord’s insurance
will cover the actual building in a fire, students without renter’s insurance will be
left on their own to replace damaged belongings such as a stereo, television, computer or wardrobe.
Rodeen said another benefit to renter’s insurance is liability coverage. If someone gets hurt on a student’s property, he or she will be covered. For instance, renter’s insurance can help students out if a friend falls down the stairs, breaks a leg and decides to sue.
Renter’s insurance will also cover personal belongings when they are in transit,
as when a television breaks while
being moved.
When purchasing renter’s insurance, students should look at how their policy will replace lost or damaged items. The two options are Actual Cost Value or Replacement Cost Value. An ACV policy will reimburse students for the value of the item at the time of loss. For instance, if students lose a
5-year-old couch in a fire, they will only be reimbursed for the projected value of that couch. However, an RCV policy will reimburse them the cost of replacing that item, regardless of its age or condition.
“It’s not to your advantage to have an ACV policy,” said Rodeen, whose office does not offer such policies.
In addition, renter’s insurance can help students establish a presence in the insurance community.
“When you get into the world and buy a home, you already have an insurance background,” Rodeen said.
In all, renter’s insurance can be a major investment that comes at a minor price.
“Insurance is piece of mind,” Rodeen said. “It’s knowing that if something happens, it’s going to be replaced.”