Insuring Your Place in the Post-College World

If you are about to graduate from college, there are three financial things you should definitely do once you get your real-world job.

First, make sure you sign up for the 401(k) plan or any similar retirement plan if it's available. Second, through payroll deduction, set aside a percentage of your pay in a savings account (not checking) that you will not touch. This will be your emergency money. I suggest 10 percent from every paycheck.

And, if you are renting, get renter's insurance.

You've probably heard the first two pieces of advice, but I'll bet your mama or your daddy didn't tell you about renter's insurance. And if they did mention it, in all likelihood you are planning to ignore the advice.

Renter's insurance is one of those things that young people often skip. You may figure you don't have much to lose if your apartment catches fire or if it's broken into. Or I bet you believe the landlord's insurance will cover your losses.

In both cases, you would be wrong.

Landlords typically insure building structures, but not the contents or liability of individual tenants. Renter's insurance protects your personal possessions if your property gets damaged, destroyed or stolen. The policy also gives you liability coverage if someone gets injured at your house or apartment, even in the event you accidentally burn down your apartment and the landlord's insurance company sues you for damages, according to the Independent Insurance Agents & Brokers of America, based in Alexandria.

About three-quarters of Americans insure their homes and personal possessions against fire, theft and other damages, according to a recent survey by the National Association of Insurance Commissioners. However, the NAIC found young singles often don't have renter's insurance.

But it's not just young folks.

Of families who rent, nearly 7 in 10 said they don't have renter's insurance, and an additional 5 percent weren't sure, according to a survey by Trusted Choice, a group of insurance agencies and financial firms.

Often people, especially young renters, don't think they can afford the insurance. But this type of insurance is as affordable as getting one pizza a month.

The average cost of renter's insurance is $12 per month for about $30,000 of property coverage and $100,000 of liability coverage, according to the IIABA.