Find out what renters insurance covers and if it's a worthwhile expense for college students
How Much Does Renters Insurance Cost?
You might be surprised to learn that the average cost of a renters policy is only $184 per year. That’s a really inexpensive financial safety net that no renter should be without.
If a student is renting off-campus with one or more roommates, they may be able to purchase a policy together and split the cost. However, if you’re unsure about how long your living arrangement will last, I recommend that you go ahead and buy your own policy.
The average cost of a renters policy is only $184 per year. That’s a really inexpensive financial safety net that no renter should be without.
Having renters insurance means that you’ll be in good shape if a roommate leaves the toaster oven on and causes a fire or there's a bad roof leak. You’ll have reimbursed living expenses to help pay for temporary housing and food if you have to move out due to an unexpected event. You won’t have to live without your favorite electronics or clothes for very long and can stay focused on your schoolwork.
How to Shop for Renters Insurance
When you’re shopping for renters insurance, make sure you understand whether the policy offers “cash value” or “replacement cost” for claims. Here’s the difference:
- Cash value coverage reimburses you for the value of personal belongings at the time of a claim. For example, if your 3-year-old mountain bike is stolen, you’d receive the value less depreciation. If the original cost was $2,000, you might only receive $1,000, minus the deductible.
- Replacement cost coverage reimburses you for the full value of an item. So if you’d have to pay $2,500 to buy that same mountain bike today, that’s what you’d receive, less the deductible.
Premiums for replacement coverage will be higher than for cash value, but can be worth it if you have to make a substantial claim.
Tips to Find the Best Renters Insurance
Here are 3 tips to help parents and students find the best renters insurance:
Tip #1: Ask Your Insurance Agent
If you already have a home or renters policy, find out exactly whether your student can be covered and at what cost.
Tip #2: Ask Your School
Many colleges and universities strike deals with certain insurance companies that allow students to receive discounted rates.
Tip #3: Shop Around
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