Young, Fabulous – and Insured: Part 1

Insurance isn’t usually top of mind for young adults heading off to college or renting their first apartment. (It wasn’t for us at the time, either.)

But, like mom and dad always say, with freedom comes responsibility—in this case, the responsibility to protect yourself, your belongings, and others by taking out renters and auto insurance policies.

“For many young people, leaving home means taking on new freedoms and developing a sense of responsibility,” says Loretta L. Worters, vice president of the Insurance Information Institute. “Part of that new responsibility means being properly insured to protect valuable belongings.”

The good news is that many young adults don’t even need to take out additional policies; and, for those who do, some policies cost mere cents a day. That should be good news to both young adults and the folks who taught them the many meanings of “safety first.”

Protect your (temporary) home

Dorm dwellers and apartment renters alike should definitely get schooled in insurance. Young people who are not full-time students or who are over age 24 will want to learn even more.

“When kids are away at school, they’re considered residents of their parents’ household and are covered to the full limit of the parents’ homeowners or renter’s policy until they’re 24,” says Terry McConnell, ERIE’s vice president and manager in Personal Lines Underwriting. This holds true for dorms and apartments as long as the young adult is a full-time student and maintains residency in their parents’ home—which they must have lived in directly prior to moving out—as their permanent residence.

Things are a little stickier with non full-time students and renters who are 24 or older. To protect this group’s personal property against damage from fire, smoke, theft, vandalism, lightning and other common disasters, they’ll need to take out a standard renters insurance policy, such as ERIE’s Tenantcover Policy.

This policy offers personal property coverage, loss of use (coverage that kicks in to take care of living expenses associated with a temporary relocation), personal liability protection, and medical payments for damages or injury that occur in your rental unit or as a result of personal activities away from home. And, like a homeowners policy, you’ll have worldwide coverage that protects your possessions when you’re anywhere away from home, whether in an exotic locale or at a friend’s place across town.

Tenantcover protection (including liability protection), which starts at $100,000 and goes up to $1 million, typically costs less than $100 a year and costs far less when paired with an ERIE auto policy. It’s recommended that renters consider at least a personal liability limit of $300,000 and that they opt for replacement cost over actual cash value.

“In an actual cash value settlement, if something happened to that T.V. you’ve had for 15 years, you’d receive the money it was worth with the depreciation factored in,” McConnell says. “With a replacement cost settlement, you’ll be able to buy a brand new T.V. There’s a small difference in premiums between the two, but the value it provides Customers dealing with an unfortunate situation is significant.”

Tips to keep your stuff safe

Even with a renter’s insurance policy in place, it still pays to practice some tips to stay safe and keep claims in check. Here are a few to get you started:

  • Safeguard pricier items—or just leave them at home. Dorms and rentals experience up to 50 percent more incidents of theft, with expensive bikes, jewelry, watches and laptops being some of the biggest targets. So take care to lock them up or leave them at a trusted residence that doesn’t have a high level of foot traffic.

Renters should also be aware that ERIE has a $3,000 coverage limit per item for theft of such things as jewelry and watches. So, if a prized possession is worth more, make sure to take out an additional personal inland marine rider (also known as a “floater”) on the policy.

  • Lock your doors. Sounds obvious, but most dorm thefts occur during the day.
  • Fireproof your home. Don’t leave candles, cigarettes and grills—the most common causes of fires—untended. To be extra safe, consider flameless candles, indoor grills and simply kicking the habit.
  • Engrave electronics. Engravings make it easier for police to track down stolen computers, televisions and iPods.
  • Create a home inventory. By saving all receipts from major purchases, making a detailed list of everything of value in your home, and photographing or videotaping your possessions, submitting a claim will be easier and you’re more likely to receive reimbursement for what’s stolen or damaged. To make the process a cinch, the Insurance Information Institute offers free online home inventory software at Know Your Stuff.
  • Consider adding Identity Recovery coverage to your policy. Young people are more likely to experience identity theft due to the extra time they log on the internet. Luckily, for just $20 a year, ERIE will do the dirty work of restoring your good name and reimbursing up to $25,000 of fraudulent credit card fees if it happens.

Insurance 101

There’s no doubt about it—insurance can be as head scratching as a trick question on a final exam.

While we can't make it any less complicated, we can help it make more sense. To understand exactly how ERIE’s policies can safeguard you and give you peace of mind, we suggest you check out these ERIE resources:

ERIE’s Web site  –You'll find lots of no-nonsense information and insurance glossaries along with a free online auto quote tool, life insurance calculator and plenty of FAQs.

The Eriesense archives – Here, you can search by keyword to access every article on a given topic.

Your ERIE Agent–The Agent’s job is to help you, so don’t hesitate to throw any questions his or her way.

Another treasure trove of all things insurance is at the Insurance Information Institute’s Web site.

Young, Fabulous – and Insured: Part 2

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