September 1st, 2012
Students Need Rental Housing
As a new school year has just begun, many students will be moving out for the first time……first time renters! In the rush of packing and collecting second-hand furniture from friends and relatives, it’s common for new renters to forget about tenant insurance.
A Student’s Experience Without Renter’s 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 of 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.
He Looks Back
When I look back, skipping out on the $10- to-$25/month it cost for a tenant’s package was foolish. Adding up all my possessions – including my computer, iPod, phones, digital camera, clothes, DVDs, 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:
Myth One: I will be covered by the landlord’s house insurance
Myth #1 is 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.”
Myth Two: I’m covered under my roommate’s insurance policy
Renter’s insurance will generally only cover your personal belongings, and not anybody else’s – even if you’re living together. Some roommates might decide to purchase joint insurance, however 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?”
Myth Three: There’s really no change of something bad 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.
Myth Four: Tenant’s insurance is super expensive
Policies can actually be very affordable. I bundled my auto and home insurance together with the same insurance provider, and pay $18/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!
Myth Five: I’m covered under my parents’ insurance policy
You could be covered by your parents’ policy if you live away from hone 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 of your possessions.
Alberta Landlords make sure you inform your tenants about the importance of Tenant Insurance!
Also, remember to be aware of rental scams out there.
To discuss this go to the Landlord forums.