Renter’s insurance covers the cost of your personal property in the event of a fire, smoke damage, lightening, broken windows, water damage, theft, or weather-related loss. This includes the cost of medical expenses if a guest gets injured while visiting you. It may also include the cost of legal defense if you are sued by the injured party. The insurance coverage also includes the cost of temporary housing and meals out while the rental property cannot be occupied. The landlord’s insurance doesn’t cover your personal property or the inconvenience if you have to find somewhere else to live; his insurance only covers the replacement of the building.
The cost of a renter’s insurance policy is relatively small compared to replacement costs of all your possessions. Watch the terms of your policy. Actual cash value nets you less cash in the event of a break in or property loss because the insurance company will only pay you what they think your items were worth at the time of the loss. If your TV was several years old, you may get nothing for it even if it was stolen. Replacement cost may be worth a few dollars more a month for the renter’s insurance policy because the insurance company will pay you whatever it costs to replace the lost or stolen item. Borrow a video camera and take pictures of your possessions and store the videotape or disk somewhere other than your apartment or dorm room. You can use it later for proof of your losses and to help you determine what is missing if you are a victim of a break in or vandalism.
College students should insure what they bring to the college dorm room, sorority house, or fraternity house. They may have a lot invested in computers/printers/scanners, cell phones, Blackberries, iPods, DVD players, game systems, DJ equipment, musical instruments, jewelry, sports equipment, and designer clothing and shoes. College students who live off campus, but still within walking distance to the university should get renter’s insurance because there is usually a high theft rate in areas close to campuses. Drug users and other criminals expect students to have new, portable electronic devices that they can sell easily so college students and their neighborhoods are targets for burglaries.
Anyone just starting out on their own should get renter’s insurance. Most people starting out on their own have high credit card debt and student loans so they would find it difficult to replace the personal belongings they moved from the college dorm and the new furniture that they are still paying for.
If you live in an area prone to tornadoes, floods, hurricanes, wild fires, or earthquakes, you may need to get additional insurance to cover these disasters. Read your renter’s insurance policy if these events are specifically excluded from coverage. Accidental water damage from a broken pipe (yours or another tenant’s) will probably be covered by under the regular renter’s insurance policy. You could find yourself paying for a portion of the repairs for a water line break if you live in a sorority or fraternity house because the residents of these houses share all the living costs in these houses.