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Renters insurance an essential 'school supply'While many college students around the country are making lists of things they need to take to school in the fall, there is one important item they should add to their "school supply" list. It is not a new shower curtain or throw rug; it is renters insurance. Renters insurance is vital to students starting out on their own, said Sissy Osteen, Oklahoma State University Cooperative Extension Service resource management specialist. "Many of today's young adults have several hundred or even thousands of dollars worth of electronic equipment, including televisions, DVD players, cell phones, computers, printers, etc.," Osteen said. "These electronics, coupled with furniture, clothing and other household items add up to quite a bit of money. Renters insurance helps ensure things can be replaced in the event of a fire, theft or weather-related disaster." Just like homeowners, renters face the same risk of losing their possessions. Although the landlord probably has insurance of the building, this policy does not cover the resident's belongings. Osteen said there are several types of residential insurance policies, but keep in mind that if you live in an area prone to flooding or earthquakes, a separate policy or rider is needed. "When considering your options for renters insurance, be sure to check the policy to see if it will offer 'actual cash value' or 'replacement cost' coverage for your belongings," she said. "As the name implies, actual cash value will only pay what your property is worth at the time it was damaged or stolen. For example, if you bought a television five years ago for $500, it wouldn't be worth near that price today. Even though you would probably spend another $500 for a TV, your insurance company will only pay what the old one was worth, minus the deductible." However, replacement cost coverage will pay what it actually costs to replace the items that were stolen or damaged, minus the deductible. Replacement cost coverage will cost more in premiums, but will pay out more in the event you need to file a claim. "Be sure to let your insurance agent know about items that are particularly valuable, including jewelry, antiques or electronics," Osteen said. "These may be only covered up to a certain amount. If you own items that are unusually expensive, such as a piece of jewelry, you may want to purchase a separate rider." To help ensure you are properly compensated for any belongings you lose in a fire, storm or other disaster, inventory all of your personal belongings. List each item, its value and serial number. It is a good idea to take pictures of items or even videotape the entire room. Keep a copy of photos and/or video separate from your residence. It also is a good idea to keep receipts in a fireproof place or scan them and keep them on a network drive on your computer. If your apartment, condominium or rental house becomes unlivable due to a storm, fire, broken water pipe or other reason covered by your policy, your insurance will cover your additional reasonable living expenses. This generally means paying for you to live elsewhere. "This type of coverage usually is limited to about 30 percent to 50 percent of the total value of the policy," she said. "If you're insured for $50,000, your 'additional living expenses' will be covered from $15,000 to $25,000, depending on your policy." Just like any other type of homeowners' insurance policies, the premiums on renters insurance will depend on a variety of factors, including where you live, the amount of the deductible, the insurance company and other additional coverage you may need. In general, renters policies are inexpensive. "As you're out shopping with your college student to stock up on notebooks, futons and a new backpack, make time to stop by your insurance agent and check on renters insurance. In the event of a disaster, it will be time and money well spent," Osteen said. 8/25/08 Date: 8/15/08 Advertisement
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