FOR RELEASE: August 26, 2009

FOR INFORMATION: Mary Bonelli / Mitch Wilson
614.228.1593
After hours: Mary - 614.443.0400 / Mitch - 614.868.0575

Attention college-bound (and all) renters: Here’s how $14 per month (or less) protects you

For about the cost of a DVD or five gallons of gas, Ohio renters can protect their belongings for a month. According to the Ohio Insurance Institute (OII), the cost of renters insurance is considerably less than homeowners insurance, yet it’s one of the most overlooked insurance policies available.

A 2006 Insurance Research Council survey found that while 96% of those who own homes carry homeowners insurance, only 43% of tenants purchase renters insurance.

“There are a number of possible reasons for overlooking this coverage,” said OII President Daniel J. Kelso. “Some renters mistakenly presume their belongings are covered by the landlord's policy in case of fire or theft and this is not the case. Others may think it’s expensive when in fact, the average renters policy in Ohio is about $163 a year, less than $14 a month.“

Another reason renters may forego coverage is because they feel secure, especially in apartment complexes or high rises. In reality, rental properties are 50% more likely to be victimized by a burglary than owned homes, according to the US Bureau of Justice Statistics, National Crime Victimization Survey.

“Also some renters may not think that what they own is worth the cost of renters insurance,” added Kelso.

Most renters, according to industry resources, have at least $20,000-worth of property. OII suggests taking time to inventory what you own-CD/DVD collections, televisions, computers, books, clothing, kitchen items, small appliances, sporting goods, miscellaneous electronics, furniture, etc. It could make you realize that replacing possessions may well be worth the cost of insuring them.

A free online inventory program, www.knowyourstuff.org, enables consumers to keep a list of what they own safely, securely and easily. Click here for other ways to inventory your belongings.

Who needs renters insurance?
Anyone renting an apartment, condo or home is a candidate for renters insurance. College students renting an off-campus apartment or house should consider renters insurance. OII advises parents to check their policy or consult their insurance company or agent about additional coverage needs for college-bound students.

“In many cases a student’s personal property may not be not covered if living off-campus, even if the student is considered a dependent under the family’s homeowners insurance policy,” said Kelso.

If a college student lives off-campus with one or more roommates, they may be able to purchase a joint renters insurance policy while some insurers may require separate policies for each roommate. If you or your roommate have a pet, liability coverage may be as important as protecting your belongings.

"If your college student lives in a dormitory and is still considered a dependent, the family's homeowners insurance policy likely provides coverage for possessions taken to school," said Kelso. However, depending on what your student takes, you might be limited on how much coverage actually applies.

"Typically, insurers limit coverage to 10 percent based on the personal property limits under the family's homeowners insurance policy," Kelso said, adding that coverage would typically be in the $2,500 to $10,000 range. "Whether this is enough protection depends on the family homeowners policy limits and what is actually taken to college."

Property protection tips for college-bound students
Many college students take high-ticket items along with them. This includes stereo equipment, laptops, iPods, digital cameras, cell phones, bikes and televisions, along with clothing and other personal items. 

The Institute recommends taking an inventory of such items before heading to campus. Take pictures of these items, record the model and serial numbers of electronics, store receipts that document purchases and compile this information in an online inventory. The student's drivers license number and state should also be etched on valuables for identification purposes. Law enforcement can track down the owner of stolen equipment more easily when such information is engraved on personal property.

"Based on the inventory, you and your insurance company or agent can make proper coverage decisions before a loss occurs," said Kelso.

What’s covered?
Renters insurance covers against losses such as theft, vandalism, fire or lightning, windstorm or hail, smoke, water-related damage from home utilities, electrical surge damage and more.

Most policies provide additional living expenses (ALE) coverage if your home or apartment becomes uninhabitable due to a covered peril such as fire. Renters insurance will cover expenses for you to live elsewhere while your apartment is being repaired, rebuilt or until you relocate. ALE coverage is usually limited to 30-50% of the total value of the policy. So, if your belongings are insured for $100,000, the ALE limit is $30,000-$50,000, depending on your policy.

Liability protection is also standard with renters policies. This means if someone slips or falls in your apartment, your pet scratches or bites a neighbor or you hit someone with a ball on the golf course you're covered for related costs, up to your policy’s liability limits. This also covers a renter being sued, up to the limits of liability protection and includes legal expenses. OII recommends at least $100,000-$300,000 in liability protection, depending on circumstances.

Additional coverages
Damages caused by flooding and earthquakes are not part of a renters insurance policy. If prone to either, consider separate coverage that’s available through a flood insurance policy (assess your flood risk at www.floodsmart.gov) or a renters policy endorsement for earthquake or basement water backup.

If you own expensive jewelry or collectibles, consider optional coverage through an endorsement. Be sure to mention these items to your insurer to see if you’re covered by your renters policy or if you need additional coverage for them.

Many companies also provide identity theft coverage for a nominal fee.

Cost
When pricing a policy, consider these options. There are two types of coverage–actual cash value (ACV) and replacement cost. An ACV policy provides coverage for items at their value, taking into consideration their depreciation. So a $500 futon that you purchased five years ago would be worth less if replaced today. A replacement cost policy, which costs a little more, provides reimbursement at the current market price for all stolen, damaged or destroyed items. So, the same $500 futon would be replaced with a similar one without depreciation. Your deductible would apply in either case.

The cost of renters insurance would also depend on several factors including the deductible you choose. This is the amount you pay on each claim out of pocket. The higher the deductible, the lower the premium. Other factors include: Where you are renting, your credit-based insurance score, coverage limits, policy endorsements, pets, etc.

OII’s online renters insurance calculator provides a ballpark premium estimate based on some of these factors.

How to save on renters insurance
Many of these tips apply to homeowners insurance too.
•  Buy all your policies (auto, renter, health, life, etc.) from one source to take advantage of a multiple policy discount. If you combine your auto and renters insurance with one company, the discount may actually cover all or most of the renters insurance premium.
•  Compare quotes and coverage from a number of sources
•  Raise your deductible to a level you can afford - at least $500 if not more
•  Maintain good credit: Good credit is one of the most effective ways to lower insurance costs. A good credit rating shows the insurer that you pay your bills on time, which means you're less risky to insure - less risk leads to lower premiums.
•  Ask about discounts that might be available such as a reduced premium for monitored security systems, policyholder loyalty discounts for remaining with a company for a set period of time, claims-free rewards, possible non-smoker or senior citizen discounts, etc.
• Click here for additional tips.

The Ohio Insurance Institute is a trade association representing insurance companies and agent groups for the property/casualty insurance industry. Its main objective is to increase understanding of insurance and related safety issues.

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Did you know? Facts about renters and insurance
•  Rented households are burglarized at rates about 50 percent higher than owned households. (Source: Insurance Information Institute, based on data from US Bureau of Justice Statistics, National Crime Victimization Survey)
•  Rentals have a 41% higher chance of property theft-related crimes than owned households. This includes burglary, theft and auto theft related activities. (Source: Insurance Information Institute, based on data from US Bureau of Justice Statistics, National Crime Victimization Survey)
•  The average US renters insurance policy costs $189. In Ohio, the average renters policy is $163, based on 2006 premiums. (Source: National Assn. of Insurance Commissioners, 2009 study)
•  A 2006 Insurance Research Council poll found that 96% of homeowners had homeowners insurance while 43% of tenants purchased renters insurance.
• After averaging just 0.7% annual growth from 2003-2006, the number of renter households jumped by 2.8% or nearly one million in 2007. (Harvard’s Joint Center for Housing Studies)
•  In 2005 there were 37 million renter households. (Harvard’s Joint Center for Housing Studies)
•  Some 19% of all households reported a change of residence between 2003-2005, including 1.9 million owners who became renters. (Harvard’s Joint Center for Housing Studies)

Online resources:
•  Guide to understanding renters insurance
•  Average renters and homeowners insurance premiums by state
•  Online home inventory guide: www.knowyourstuff.org
•  Ohio renters insurance estimator
•  Rental housing studies from Harvards Joint Center for Housing Studies
•  FBI Uniform Crime Report 2007 college and universities property crime report