“Most [student] renters don’t realize what it would actually cost to replace all of their clothing, furniture, electronics, small appliances and other items,” says Brad Cooper, Senior Vice President of Operations for Insweb, an online insurance marketplace. “A total loss from a fire could result in the student needing to replace thousands or likely tens of thousands of dollars worth of possessions.”
Fortunately there is such a thing as student renters insurance which can protect your possessions from any of these events. Unlike other insurance policies, student renters insurance is cheap, simple, and covers a broad array of situations. How to find the best renters insurance, surprisingly, is a relatively straight-forward process.
The main advantage to student renters insurance is that the student’s claims won't affect the parents’ homeowners insurance. In addition, the policy can be personalized specifically for the student. This option of property insurance helps the student judge which belongings do require insurance and which of them don’t. A customized insurance policy can ensure that the student’s possessions are effectively covered.
According to the Commonwealth of Massachusetts most student renters insurance policies provide two types of coverage: personal property and liability insurance. Personal property coverage pays to repair or replace personal belongings if they are damaged, destroyed or stolen. This is the most commonly purchased student renters policy.
On the other hand, the biggest disadvantage of students renters insurance is that it is more expensive than simply staying on your parents' plan. However, due to the policy’s ability to be flexible the policy doesn't have to be overly pricey. Students have the opportunity to be specific with what they want fulfilled. Renters insurance offers a variety of options for students to choose from, and there are ways to bring costs down.
“There are a lot of things students can do to save money on renters insurance. First, some insurers simply offer discounts to full-time students,” says Cooper. “Another common discount is when the student has his or her auto and renters insurance with the same company” who can offer a discount of up to 10 percent on each policy. Furthermore, you can lower monthly payments by proving you have sufficient security-- like an anti-theft device or a deadbolt. Your credit score will also influence your quest in how to find the best renters insurance.
“Protect your credit score. Your credit score will be translated into an insurance score,” says Linda Rey of the Rey Insurance Agency in New York. “The lower the credit score, the lower the insurance score, the higher the premium. The higher your credit score, the higher your insurance score, the lower the premium.”
When thinking about how to find the best student renters insurance, pay close attention to the fine print. Typically, student renters insurance comes with two options: actual cash value (ACV) and replacement cost value. ACV means that when you make a claim to replace lost, stolen or damaged items, the insurance will cover the value of that item at the time of the claim. If you bought a television for $500 two years ago, chances are that it has decreased significantly in value since then, even though you might have to shell out $500 for a replacement.
Replacement cost means that the company will replace the exact item. Because this policy comes at a higher cost to the insurance company, you will have higher monthly payments.
Keep this information in mind when searching for student renters insurance to make sure you get the best deal possible.