Insuring Your Place in the Post-College World

When buying renter's insurance, you should consider replacement cost coverage as opposed to "actual cash value," the NAIC recommends.

There is a big difference between the two types of coverage. Actual cash value is the amount it would take for you to repair or replace your damaged possessions after factoring in depreciation. Replacement coverage pays you what it costs to replace the items you lost. Of course, the latter is more expensive than actual cash value insurance. But if you can afford the higher cost, get it.

Oh, and for those parents sending children to college in the fall, check to see if they are covered under your own homeowner's or rental policy if they plan on living in an apartment off campus. Dependents, such as college students, are typically covered under their parent's or guardian's policies, according to the NAIC. On average, a dependent is covered for up to 10 percent of the parent's policy.

However, that coverage may not extend to off-campus apartments. If your child is not covered, then you need to get renter's insurance. Think about what could be lost -- a computer, printer, stereo, flat-screen television, DVD player, iPod, cellphone.

The college lifestyle puts them at risk, with unlocked doors, pizza delivery and parties, the IIABA points out.

Here are some additional things to consider when buying renter's insurance:

· Usually, it's best if all roommates are on the same policy, although it is possible for each to buy his or her own coverage. If only one roommate purchases renter's insurance, only that person receives the benefit of coverage.

· Standard renter's insurance excludes damage from earthquakes and floods, so talk to your insurance agent about coverage for these incidents. Most policies limit reimbursement for theft of valuable items such as jewelry, furs or fine art. If you have particularly valuable items in these categories, you may need to purchase additional inexpensive coverage called a "floater."

· If you damage the building's lobby or walls moving furniture into your apartment, you could be held liable. Likewise, if a fire starts in your unit and spreads through the building, you could be held liable for the entire structure if you are deemed at fault. Renter's insurance shields you from these liabilities.