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Do College Students Need Renters Insurance?

Find out what renters insurance covers and if it's a worthwhile expense for college students

By
Laura Adams, MBA
4-minute read
Episode #326

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

Get quotes from several insurance companies and compare prices. You can use sites like InsuranceQuotes.com and NetQuote.com to get free quotes.

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About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.