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Why students should get household insurance

Posted: September 26, 2012

Many young people have settled into their new dorms and off-campus housing, most for the first time. In the rush of packing and collecting second-hand furniture from friends and relatives, it’s common to forget about tenant insurance.

As a student, I assumed that renter’s insurance was an expense I could skip, because I didn’t own anything of value.

“Consider the cost of replacing your laptop or smartphone if you were robbed,” says Dave Minor, a vice-president with TD Insurance. “Before moving out, it’s important to understand the basics of renter’s insurance and ensure you have the right coverage in place to protect yourself.”

When I look back, skipping out on the $10 to $25 per month it cost for a tenant’s package was foolish. Adding up all my possessions — including my iPod, laptop, cellphone, digital camera, clothes, CDs, etc. — my stuff was worth well over $10,000. And if I had lost it all in a fire or a robbery, I wouldn’t have had the money to replace any of it.

Here are five common myths:

1. I’m covered by the landlord’s insurance

A landlord will likely only have insurance to cover the building — not your personal effects. Even if you truly don’t have anything of value, third-party liability is one of the biggest reasons people use renter’s insurance.

“If the pizza delivery person slipped on ice outside your apartment building, the negligence would likely lie with the landlord who is responsible for salting the sidewalk,” Minor says. “However, if they slipped inside your apartment because you didn’t clean up a puddle, you may be liable for their medical bills, lost wages and damages for pain and suffering out of your own pocket.”

2. I’m covered under my roommate’s policy

Renter’s insurance will generally only cover your personal belongings, and nobody else’s, even if you’re living together. Some roommates might decide to purchase joint insurance, but there should be a discussion about how each person will pay for the policy, as well as a clear understanding of what each roommate’s stuff is worth.

“One roommate’s valuables may hold less value than the other roommate,” Minor says. “In this case, will the two roommates pay the same contribution to the policy?”

3. There’s a small chance of something happening

Accidents can happen to anyone. As well, this insurance covers things you take out of your home. For example, I once had a CD binder stolen from my car while I was downtown, and renter’s insurance helped me recover the full value of the CDs that I had lost.

4. Renter’s insurance is expensive

Policies can be very affordable. I bundled my auto and home insurance together with the same insurance provider, and pay $18 a month to cover my townhouse.

Try going through any student or professional groups you belong to, as well as alumni associations, to yield even more savings.

You could also try choosing a low coverage amount or a high deductible to get a cheaper monthly rate. Contact a few insurance providers to learn more about your options, and don’t forget to compare prices.

5. I’m covered under my parents’ policy

You could be covered by your parents’ policy if you live away from home while in school, but it might not give you enough coverage. Contact the insurance provider to find out exactly what you’re covered for.

Make sure to do an in-depth home inventory check. It might also be a good idea to take a photograph of each item. Doing a complete home inventory will let you see exactly how much coverage you will need to protect all your possessions.