Be sure to check in with your clients as we approach the fall to make sure that their home is covered, but also that their college students have the coverage that they need as they go off to school.
What is renters insurance?
Renters insurance coverage protects your client’s personal property against damage or loss, and protects them in case someone is injured while on their property.
Why should my client Purchase Renters Insurance?
College students living in off-campus rental housing or dorm housing are ideal candidates for needing renters insurance, since many students bring thousands of dollars worth of personal items along with them. Students typically bring electronics, a computer, textbooks, clothes, furniture, and a bicycle to school with them. The value of those items all together is high, and would be hard for a student to replace in the event that it is stolen or damaged as a result of a fire, theft or other unexpected circumstances.
In a renter/landlord relationship, it is the renter’s responsibility to provide coverage for these valuable items. In school dorms, personal property is typically not covered- however checking the school policy is important. Personal property coverage can extend from a parent’s homeowners policy, so reviewing coverage is an important step.
Premiums for this type of coverage are usually very low- between $15-30 a month on average depending on the carrier, size of the unit, location, and policyholder’s possession value.
It is a low price to pay for peace of mind.
Basic Coverage types offered for Renters Insurance
Personal Property Coverage
This covers the costs to repair or replace personal belongings if they are damaged, destroyed, or stolen. This is the most commonly purchased renters policy.
Expensive items, such as fine jewelry or a large amount of technology, may require the renter to purchase additional coverage. When helping your client choose a policy, it is important to keep in mind the value of the items that will be in the rental property and check that the limits would cover replacing them.
Liability Insurance Coverage
This 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.
Pair them with the Right Coverage
Another important factor to look for when helping your client find a renters insurance policy is the “actual cash value” vs. “replacement cost” coverage for their belongings.
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, as the insured is only reimbursed for the value of the item at the time of the loss.
For example, if a television that is damaged five years after initial purchase, the insured will not get the initial purchase price that they paid for the item.
Parents’ Homeowners Insurance
Some homeowners policies extend coverage to dependents of their policy holder and their possessions. If that is the case, belongings of the student may be covered, but the deductible still lands in the hands of the policy holder.
In this process, it is important to review homeowners coverage as well. This also lends an opportunity to be sure that the home is covered for any changing risks or updates.
Additional Education to Share with Clients Regarding Renters Insurance
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 to take photos or video footage of any personal possessions for documentation, making sure it is stored in a secure, off-site location. There are great apps available for iOs and Andriod that can assist with taking this inventory on a mobile device. Some highly recommended ones are Sortly, Magic Home Inventory, and MyStuff2.
When determining how much, if any, renters insurance you should purchase, estimate the value of personal possessions. This is the amount of insurance that your client will need to replace the contents of their home if everything were destroyed.
If a college student is living in an off-campus house or apartment with one or several roommates, they may be able to purchase a renters insurance policy together as a group. Some policies automatically extend coverage to any resident of a policyholder’s household who fits the definition of a “domestic partner.” Otherwise, consider carrying separate coverage for each of the adult tenants.
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