Protect Yourself With Renter’s Insurance

As thousands of Michigan students head back to college this fall, the Office of Financial and Insurance Services (OFIS) urged college students to consider getting renters’ insurance to protect their personal property against damage or loss, and insure them in case someone is injured while on their property. The personal property of students who live in rented apartments, houses or condominiums will not be covered by their landlord’s insurance in the event of a fire, theft or other unexpected circumstance.

“College students living in off-campus housing are ideal candidates for needing renters’ insurance, since many students bring thousands of dollars worth of personal items, such as electronics, a computer, textbooks, clothes, furniture, and a bicycle, with them to school,” Commissioner Watters said. “It is the renter’s responsibility to provide coverage for these valuable items.”

Watters noted that even if a student is a dependent under his or her parents’ insurance, the student’s personal property, in many cases, is not covered if the student lives off campus. Parents should check their policy or contact their insurance agent to see if renters insurance is right for their son or daughter who is away at school.

A student who is under 26 years old and is enrolled in classes and living in on-campus housing may be covered under his or her parents’ homeowners or renters’ insurance policy. The premiums for renters’ insurance average between $15 and $30 per month, depending on the location and size of the rental unit and the policyholder’s possessions.

Most renters’ insurance policies provide two basic types of coverage: personal property and liability. Personal property coverage pays to repair or replace personal belongings if they are damaged, destroyed, or stolen. This is the most commonly purchased renters’ policy. Liability insurance provides coverage against a claim or lawsuit resulting from bodily injury or property damage to others caused by an accident while on the policyholder’s property.

Unusually expensive items, such as fine jewelry or an art collection, may require the renter to purchase additional coverage, called a “rider” or “floater”. The policyholder’s insurance agent can help determine if additional coverage is necessary.

Another important factor to look for when shopping for renters’ insurance is “actual cash value” vs. “replacement cost” coverage.

Actual cash-value coverage will reimburse the renter for the cost of the personal property at the time of the claim, minus the deductible. It’s important to account for depreciation when
considering this coverage option. For example, if a five-year-old stereo system were stolen from an apartment, the policyholder would be reimbursed for the current value of the system.

Replacement cost coverage, on the other hand, will reimburse the full value of the new stereo system. While the up-front cost is greater, the policyholder is more likely to receive accurate compensation for his or her possessions.

When a claim is reported, the insurance company will ask the policyholder for proof of purchase for all items reported on the claim. A comprehensive list of possessions, including purchase prices, model numbers and serial numbers, will suffice. It also is a good idea for renters take photos or video footage of any personal possessions for documentation, making sure it is stored in a secure, off-site location.

“One of the smartest things a renter can do is reduce the chances of needing to file a claim altogether by requesting that the property owner install an anti-theft device, smoke detector or other safety device,” Watters said. “In all cases, it is recommended to check your current insurance policy or contact your agent when deciding whether or not to purchase renters insurance for a student away at college.”

For more information on insurance or other financial matters, call OFIS toll-free at (877) 999-6442 or visit www.michigan/gov/ofis.