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How much would it cost to replace everything you own? If something happens to the home or the apartment you rent, the owner’s or landlord's insurance policy WILL NOT pay to replace your belongings. Their insurance covers the building, not your personal property. That’s where renter’s insurance comes in.
If there’s a fire, theft or non-flood water damage, renter’s insurance will cover your personal property, your liability and more in case of a loss.
Renter's Insurance - To Purchase or Not to Purchase
"Open Peril" provides coverage for any reason not specifically excluded. Because there is more coverage under this policy, this kind of insurance is more expensive. The burden of proof is on the insurance company to show that coverage is excluded.
Let’s say you lose an audio system that was purchased five years ago, and you make a claim. If you have actual cash value coverage, you will be reimbursed for the current value of the system, but this may result in a lower claim payment than you expect. Meanwhile, replacement cost coverage will reimburse you for the cost of a new audio system, after you purchase the new system and submit your receipts. Although the up-front cost is greater for replacement cost, you are more likely to receive better compensation for your lost possessions.
It is also important to remember that the value of the dollar changes over time. Your audio system may have cost $1,000 when you bought it, but the same audio system may cost $1,200 now. Be sure that your insurance policy accounts for the cost of your belongings in today’s dollars.
Make a list of your belongings before disaster strikes. You can use Colorado Division of Insurance’s free Home Inventory Checklist. Be sure to store a copy in a safe place away from your home, or create an electronic copy and email it to yourself. The checklist also is available in Android and iPhone apps from the National Association of Insurance Commissioners (NAIC).
For college students who live on- or off-campus housing, personal belongings can be covered with their own policies or through an extension of their parents’ homeowner or renter's insurance policies. If a college student is under 24 years old, enrolled in classes and living in on-campus housing, the student may be covered under his or her parents’ policy. On average, a dependent is covered for up to 10 percent of the parent's content coverage. For example, if the content coverage on the parent's policy is $100,000, the student's coverage would be for up to $10,000 in losses.
However, if a student is independent and living in an apartment, a separate renter’s policy would be appropriate. Check with your insurance agent for the specific provisions of your policy.