Rental Insurance for the College Graduate


Graduation

Trying to think of a gift for a special college graduate? If you lean to practical gift giving, rental insurance might be just the ticket! OK, it might not have the same immediate allure as cash, but it could be much more valuable in the long run. Even if you don’t want to give it as a gift, you can do the young renter a huge service by helping them to understand the importance of this coverage – and by dispelling a few myths, in the process.

Homeowners understand the importance of home insurance. The Insurance Information Institute (III) reports that about 95% of all homeowners have insurance. Renters not so much. In a 2014 survey, only 37% of renters said they had rental insurance coverage.

Rental Insurance Myths

There are several misunderstandings about what rental insurance is and why it’s important. Here are a few myths and objections that we often hear.

My landlord has insurance. Many renters are under the false impression that they are covered under landlord’s policy but the landlord’s policy is for the building. If a fire or some other disaster occurred, a renter’s personal possessions would not be covered. Plus, a landlord’s policy would not help you with expenses for temporary living if the building is destroyed or for any bodily injury lawsuits that could happen if someone is injured in your apartment.

I don’t own enough to make it worth it. That’s rarely true. Look around your apartment at furnishings, electronics, kitchen goods, clothing, books … how much would it cost you to replace those things if you had to start from scratch? Plus, renters insurance also offers liability protection against bodily injury or property damage lawsuits and coverage for additional living expenses if you are displaced from your home in a disaster.

I can’t afford it. Rental insurance is surprisingly affordable. III did a national assessment of average rental and homeowners premiums in 2012 and found that the average rental premium was $187 a year. It can work out to as little as $12 to $14 a month. The amount you (or your premium) will vary by state and by what type of and how much coverage you need.

I’m not sure what or how much to buy. An independent agent can help you determine what you need and can tell you about various options – such as “actual cost” vs “replacement value.” They can advise you on deductibles and whether there are any add-ons that would be beneficial to your unique circumstances. A good agent will be able to get quotes with several insurance companies and will advise you about any available discounts. For example, there are sometimes discounts if you combine a rental policy with your car insurance.

Learn more about Renters Insurance

Renters Insurance Checklist
What you need to know about rental insurance

 

Don’t be our next sad story: Look into rental insurance


damage

Here’s a sad story we’ve heard all too often: a renter has a fire and loses everything because they don’t have rental insurance. We aren’t the only ones who hear this story – the Red Cross says they run into this scenario more and more often. In fact, a recent poll by the Insurance Information Institute (I.I.I.) reveals that only 37 percent of renters have renters insurance, versus 95 percent of homeowners who have a homeowners insurance policy.

We hear all kinds of excuses:

Myth: My landlord’s insurance will cover loss. Reality: the landlord’s insurance covers their building, not your property

Myth: It’s too costly. Reality: It is cheaper than you might think – especially considering the alternative. According to I.I.I, “…the average cost of a renter’s policy is only $187 per year, or less than four dollars per week.”

Myth: My possessions aren’t valuable enough to cover. Reality: It’s very costly to replace everything. Even for students in furnished apartments, the cost of replacing clothes, books, laptops, and other personal possessions can add up. Plus, renters insurance covers many things people often don’t expect. It would help protect you if a guest were injured in your home or if a laptop were stolen from your car. It would also help to pay for temporary living expenses if your apartment is destroyed.

I.I.I. offers a Renters Insurance checklist and check out the short video clip below to get advice from a dummy 😉  We also encourage you to give a call to your local independent insurance agent to learn more.