Do College Students Need Renters Insurance?

Do College Students Need Renters Insurance?

As a demographic, the college and young professional population has a very distinct lifestyle that unfortunately carries along with it an increased risk for being on the wrong side of your liabilities. The following items are indicators that a renters insurance policy could end up saving you big time if you end up in any of life’s unexpected sticky situations.

Let’s face it. College students and young professionals are social creatures. We’ve coined the phrase “Xday is the new Friday.” When you bring these social gatherings into our home however, there are accidents that will happen and responsibilities that you stand to bear.  If your friend spills a drink on your brand new stereo system, TV, laptop, or any other expensive electronic item it’s likely that your limited warranty doesn’t have an accidental damage policy. Did you know that renters insurance not only covers the property in your home but also possessions in your car? Also, a policy will provide coverage for personal liability if someone is injured at your home, or if it is the sad reality that social host laws hold you liable for people consuming alcohol and causing damage or injury to others. With protections from these unfortunate situations, it makes it much easier to enjoy the comforts of your home, worry-free.

The amount of college loan debt is greater than that of total credit card debt, which is a large part of the reason that as a young professional or college student you likely don’t have a significant financial safety net to fall back on in the case of a costly incident. If you’re moving to a new city to work at your dream company that doesn’t quite pay the dream salary yet, you could easily be overwhelmed if you have to replace a portion of $20,000 in belongings, which is an average total value of a renter's property. Seems like an overestimate? When you start to add up the costs to replace a computer, TV, phone and other eletronics, clothes, furniture and art, appliances and other personal effects the $20,000 figure makes sense. In the case of a burglary, fire, flood or other disaster, accidental damage and displacement from housing, your costs will be covered and you won’t be stuck having to pay out of pocket.

For many reasons it is the case that rented properties account for a greater number of robberies and burglaries per capita than owned homes. Would you be covered in the case of a robbery? It is a common assumption that as a renter you would be protected by your landlord’s insurance policy, which is almost never the case. Their insurance covers damage to their physical property, but won’t extend coverage to damage to your property as a renter. 

While it’s the case that almost anyone living in rented property can benefit from renters insurance, the numbers show that only one third of renters have a renters insurance policy. The top two reasons for not having such a policy, from an Apartments.com survey of renters nationwide, were cited as not knowing such policies existed, and the belief that such a policy would be cost prohibitive. What’s more, is that an average policy which provides $20,000 to $30,000 of coverage with a $500 deductible can cost about $12 each month. That’s right, for the cost of one medium cheese pizza each month, you could ensure that you’re protected by a comprehensive renters insurance policy if life ever deals you a bad hand. 

By Craig Bruno