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what renters should do
Two out of three renters do not carry renters insurance. If you are uninsured, you risk bearing the full cost of replacing your belongings.
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Two out of three renters do not carry renters insurance. If you are uninsured, you risk bearing the full cost of replacing your belongings.
Although your parents' homeowners policy normally covers your possessions when you live in a dorm, once you move off campus, whether as a student or as a grad, you need your own policy.
"A college student can have $30,000 worth of property when he or she graduates," says Kristin Loberg, co-author of "Renters Insurance" (Silver Lake Publishing, $11.95).
Some landlords even require tenants to get renters insurance before they move in. But you're in luck: Renters insurance is much less expensive than a homeowners policy because it doesn't cover the actual building.
A renters policy includes coverage for your belongings and liability protection in case a visitor sues you for an injury that occurs in your home. Get at least $300,000 in liability coverage, recommends Terry Balding, a financial planner and independent insurance agent.
To determine how much contents coverage you need, estimate what your stuff is worth now and round up to the nearest $5,000 or $10,000 -- the increments in which coverage is generally sold. Buy replacement-cost coverage, so the policy pays enough to cover the cost of replacing your possessions -- up to the policy's dollar limit -- rather than paying you what they're worth when stolen or destroyed.
A renters policy with a $250 deductible usually costs about $250 a year for $300,000 in personal-liability coverage and $30,000 worth of contents coverage, although the local crime rate may affect your premiums. If you're working with an agent, ask for help pinpointing the appropriate level of coverage.
You can compare costs for different policies at Web sites such as NetQuote.comInsWeb.com. But if you own a car, your first stop in the search for a renters policy should be the insurer that covers your wheels.
A multi-policy discount can be a real money saver.
Setting a high deductible can be seductive: Pushing up the amount you pay out of pocket from $250 to $500 could knock 15 percent off your premium.
You can save 25 percent by going from $500 to $1,000. But unless you have that much cash on hand, stick with a low deductible. Renters insurance is so cheap that the discount may amount to only $20 a year or so, Balding says. That's not enough to compensate you for the higher risk.
A renters policy with a $250 deductible usually costs about $250 a year for $300,000 in personal-liability coverage and $30,000 worth of contents coverage, although the local crime rate may affect your premiums. If you're working with an agent, ask for help pinpointing the appropriate level of coverage.
You can compare costs for different policies at Web sites such as NetQuote.comInsWeb.com. But if you own a car, your first stop in the search for a renters policy should be the insurer that covers your wheels.
A multi-policy discount can be a real money saver.
Setting a high deductible can be seductive: Pushing up the amount you pay out of pocket from $250 to $500 could knock 15 percent off your premium.
You can save 25 percent by going from $500 to $1,000. But unless you have that much cash on hand, stick with a low deductible. Renters insurance is so cheap that the discount may amount to only $20 a year or so, Balding says. That's not enough to compensate you for the higher risk
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