Real World 101 Blog

Renter's Insurance: Everyone Should Have It!

2008-09-05T21:30:03Z

Renter's Insurance

You're moving into a new apartment and you have a lot to do: setting up telephone and cable service, letting people know your new address, deciding how to arrange your living room -- the last thing you're thinking about is insurance. If you live in a condominium or rent an apartment, your landlord's or condo association's insurance should cover damages to the building -- meaning the structure itself. But such a policy only covers their building and not your belongings. That's why you should have renter's insurance. Regardless of whether you live in a house, condo or apartment, replacing your stuff or defending yourself against a liability lawsuit can take a big toll on your bank account.

Tip: Some landlords may require renter's insurance before you move in. Find out if your landlord does.

What you are protected from with renter’s insurance?
Renter’s insurance is the least expensive option available to you and can protect you in two ways:

Loss and damage
Renter’s insurance covers your possessions against losses from fire and smoke, theft, vandalism, lightning, wind, explosion, and water damage from plumbing. Your things are also covered away from home – say, if you’re on vacation and lose a bag – for anywhere from 10% to their full value, depending on your policy. You’re also covered under most standard policies for any items that are in your possession, such as movies you rented or clothes you borrowed from friends.

What you are covered from with renter’s insurance:
-   Fire or lightning
-   Windstorm or hail
-   Explosion
-   Riot or civil commotion
-   Aircraft
-   Vehicles
-   Smoke
-   Vandalism or malicious mischief
-   Theft
-   Damage by glass or safety-glazing material that is part of a building
-   Volcanic eruption
-   Falling objects
-   Weight of ice, snow, or sleet
-   Water-related damage from home utilities
-   Electrical surge damage

Sounds like quite a lot, doesn't it? You may notice, however, that floods and earthquakes aren't on the list. If you live in an area prone to those, you'll need to buy a separate policy or a rider on your renter's policy. In some coastal regions, where hurricanes can cause mass destruction, you may also need to buy a separate rider to cover you from windstorm damage.

Liability
Renter’s insurance covers your liability for other people injured at your home or by your pets. It also covers legal costs you might incur if you get hit with a liability lawsuit. You'll also be covered against lawsuits that come from someone getting hurt in your apartment or using your stuff. Individual policies may have differing degrees of coverage for this, so you should find out the specifics when you sign up. Also find out whether your policy covers theft by a roommate - just in case.

Footing The Bill When Your Apartment Is Unlivable
If your apartment becomes unlivable due to a fire, burst pipes or for any other reason that is covered by your policy, renter's insurance will cover your "additional living expenses." Generally, that means paying for you to live somewhere else, such as another apartment that is in a similar price range as your original place. This coverage has a limit of about 30% to 40% of the total value of the policy. So, if you're insured for $100,000, your "additional living expenses" limit will be $30,000 or $40,000, depending on your individual policy. Your insurance company will continue to pay while your home is being repaired or rebuilt, or until you permanently relocate. However, sometimes 12 months is the longest an insurance company will continue paying. Other times, you're limited to what the insurance company considers a "reasonable length of time."

Insurance Compensation Options
One thing you want to look at when you shop for insurance is whether the company will be writing "actual cash value" (ACV) or "replacement cost coverage." As the name implies, ACV coverage will pay only for what your property was worth at the time it was damaged or stolen. So, if you bought a television five years ago for $300, it would be worth significantly less today. While you'd still need to shell out about $300 for a new one, your insurance company will pay only for what the old one was worth, minus your deductible.

Replacement cost coverage, on the other hand, will pay for what it actually costs to replace the items you lost. Usually, you'll have to pay out of your own pocket to replace your damaged items and submit the receipts to the claims adjuster for reimbursement. Even so, you'll still get a bigger chunk of change back than if you bought ACV coverage.

In some places, most companies write ACV coverage. In others, they'll quote you replacement cost coverage by default. Replacement cost coverage will cost you more in premiums, but it also will pay out more if you ever need to file a claim.

Before You Buy Renter’s Insurance
The cost of your policy will be base on your estimate of how much everything in your apartment is worth. To do this, take an inventory of everything you have, from your oak bed frame right down to your gym socks. Make a list of the biggest, most expensive items and what they cost when you bought them. If the cost of items you have exceeds the policy limit, you may want to increase your coverage by paying a slightly higher premium.

Be sure to take some photos around your apartment and keep them with your list. Otherwise, you may not realize that something is missing until many years later, by which time it will be tougher to collect.

Tip: Here are some great websites that can help you keep an inventory of your valuables: www.realworld101.org/apartmentliving/insuranceinventory

What Your Policy Covers
Your policy covers all your furniture, clothes, electronic equipment, dishes - in short, everything in your apartment. There are a few extra things to keep in mind:

•   If you have expensive jewelry, worth more than $1,000, or a computer worth more than $5,000, you'll need to buy a separate category of insurance to cover them.

•   Your bike is covered, even if it's stolen when it's parked outside the 7-Eleven down the block.

•   Your roommates may or may not be covered. If you and two roommates buy a policy together and then one roommate moves out, the new roommate isn't automatically covered. Call your insurance agent to revise your policy.

•   Rented items that are stolen or damaged while in your apartment are generally covered, but ask your insurance agent to make sure.

•   Anything below your deductible is your responsibility. Generally renter's policies have relatively low deductibles - $250 to $500 - and the insurance doesn't pay for any losses until you've met your deductible.

If you want to know exactly what your policy covers, ask for a copy of the insurance company's plain-language guide, together with a list of items covered and their maximum insured values. If you have an item that is not covered and you want it to be, see if they'll include it.

Where to Get a Renter's Policy
Any insurance agent that sells homeowners' insurance can write a renter's policy. You can find an agent in the phone book and have a policy written over the phone. Your policy will cover either actual cost or replacement cost. It's important to know the distinction between the two.

Some reputable insurance companies that offer renter’s policies include Nationwide Mutual, Prudential, Allstate, Liberty Mutual, Erie Insurance, and State Farm. Check your phone book for agents who sell these brands.

Tip: Check whether your parents' insurance covers you while you're away at school. Some policies cover you as long as you are younger than 26, but check to be sure.

What will it cost?
Just like any other insurance policy, your premium depends on a number of factors: where you live, your deductible, your insurance company and if you need any additional coverage. However, if you don't need any extra coverage for expensive jewelry or computers, and you shop around, you probably will pay somewhere between $150 and $300 per year for coverage. That will get you about $30,000 to $35,000 worth of coverage for your personal possessions and somewhere between $100,000 and $300,000 worth of liability protection.

Keeping your premium low

There are a few ways you can lower your policy costs:

1. Shop around. Not all companies charge the same for the same coverage. Renter's insurance premiums vary by address, so you'll need to get a specific quote for your new place. You can get free quotes from www.insweb.com, NetQuote.com, or any major insurance company's Web site.

2. Increasing your deductible (the amount you pay before your coverage kicks in) is one way to keep your costs down. However, be sure that you'll be able to afford whatever deductible you choose.

3. Ask if your car insurance company also has homeowners' and renter's policies. Sometimes you can get a discount if you have more than one policy with a company.

4. Ask if you can get a discount for living in a relatively safe area or in a building with gated entry, bars on the windows or an alarm.

5. If you need to buy insurance and have valuables worth a minimum of $2,000, purchase at least a basic policy.

6. Go in together with roommates to keep the cost low (the regulations on allowing policies with your roommates vary from state to state).

7. If you're on your own and your only valuable possession is your computer, it may be cheaper to buy only a computer policy, which some companies offer now.

8. Most companies offer a discount for having "protective devices," including smoke and fire detectors, burglar alarms and fire extinguishers.

Other available discounts will depend on your insurance company -- be sure to ask what discounts it offers.

Filing a Claim
If you need to file a claim, start by writing down everything that happened. For example, if there was a fire, write down the date and approximate time it occurred. Also write down what was destroyed. If you have pictures of the items you need to have replaced, have these handy. Call your insurance agent and ask for claims forms. Fill them out as completely as you can, assessing all the damage. The insurance company will process you claim and mail you a check.

Hopefully, you'll never file a claim. If ten years down the line you end up resenting all the money you paid for insurance that you never needed, you'll be in good shape.

This is an excerpt from the upcoming booklet "Real World 101 Apartment Living Booklet" which will be included in all Real World 101 Care Packages. If you are interested in purchasing care packages for your students or a recent grad, please contact me at patricia@realworld101.org.

Finally Get Stuff Done

2007-12-03T16:51:12Z

People often ask me how I can stay so committed to the work I do for Real World 101, especially when I have no one to really turn to for support. I must say that it takes more that just passion to keep me on track today, it requires accountability. It's easy for others to look at a young entrepreneur and think that they are extremely driven and constantly focused, but I must tell you that's not the truth. Most entrepreneurs have some for of an accountability system to keep them going.

The system I used is from Journeypage.com and it's called Getting Stuff Done (GSD). Every weekday I call in at certain hours to report what I plan to do during a "power hour". Then when the power hour is complete, I report what I accomplished. It's a very simple system that produces tremedous results and can help you get stuff done.

So, get off your butt and join me for a call. Sign up at www.journeypage.com!

Win a FREE Care Package

2007-11-26T13:22:15Z

You can win a FREE Care Package by answering this simple question:

What would you include in a care package for graduating college seniors that would help prepare them for the "real world"?

Click Play to Listen to the Details of the contest

5 Great Ideas For Keeping Your Belt Tight on Thanksgiving

2007-11-22T17:44:19Z

First off, Happy Thanksgiving!!!

Thanksgiving is one of my very favorite holidays.

It’s impossible to be thankful and unhappy at the same time. The two emotions cannot coexist. Thankfulness magically gets rid of every other non-happy emotion there is.

I want you to celebrate the great holiday, but let’s try to mindlessly eat a little less than we otherwise would.

Here's five ideas for you today!

Wear Your Best Belt. It’s a lot easier to stop eating when you know you’re full. One great clue is when your clothes and belt starts telling you, sounds obvious, but stopping when you're full is probably one of the harder things to do at the Thanksgiving table when everyone else is helping themselves to seconds. It will be easier to stop if you slow down, drink water, wear snug pants and push away from the table when you're done.

Save your Calories for Dinner. If you want to be a great guest and enjoy the meal the most, skip the hors d'oeurves. A great basic rule-of-thumb is don’t eat anything that doesn't require a knife and fork.

Focus on the Special Stuff. Don't waste your calories on large portions of food you can eat everyday. Limit the variety you have. Let's make a rule. Only two items on your plate at any one time. Having a lot of different items on your plate at once stimulates the appetite so therefore don't have 20 different things on your plate.

Small seconds are better than Big Firsts. Some people show their love through food. Research on memory shows that your Aunt Grace won’t remember how much you take, but she will remember if you liked it enough to take seconds. Especially if you announce it. Take two small helpings of key foods than one medium/large portion.

Forget the Post Dinner Snacks We won’t starve if we skip the late night turkey sandwich. Quarter up an apple. This is a great time to focus on the family and not on the food.

Most importantly, don't sweat it if you make a dietary mistake. We all will. And we'll have the other 364 days to do it right.

Enjoy your day and from the bottom of my heart I sincerely thank you for allowing me to do what I love doing. I don't take it for granted that without you I wouldn't have a business!

And enjoy your family and friends!

Also, I wrote a nice story on my blog at GuruGilbert.com about Thanksgiving. I think it's worth the read if you have a few extra minutes.

- From our Health & Fitness Expert Adam Gilbert

Check out his inovative company MyBodyTutor.com

where has helped many shed those extra pounds

Understanding Credit: Podcast with Pat Hawkins

2007-11-05T17:53:53Z

In the latest installment of Real World 101 podcasts I interviewed Pat Hawkins of Episcopal Community Development. Pat spoke about credit scores and building credit history. She also gave great advice on how to overcome financial problems that may arise with credit (e.g. identity theft, bankruptcy, etc.) If you would like to learn more about credits scores, credit cards, bankruptcy, loan consolidation or have any questions for Pat please contact us.

Here are some of the discussed topics:

The Basics of Credit Scores and Credit History
Understanding All the Different Types of Credit
Preventing Identity Theft
Dealing with Bankruptcy
How to Consolidate Your Debt

Tell Us What You Think

2007-10-26T15:40:52Z

Call in to the Real World 101 Guest Line!

We here at Real World 101 would love to hear about your life as a recent college graduate. Tell us about the ups and downs, successes and failures, and anything else.

Also, if you have any questions for us about the Real World 101, call in and tell us. We're here to help.

(214) 615-6505 ext 4039

We can't wait to hear from you!

Real World 101 Podcasts Now on iTunes

2007-10-21T00:01:56Z

We are happy to announce that you can find Real World 101 podcasts on iTunes. Enjoy our informative interviews with experts from anywhere with your iPod or on iTunes. Don't forget to subscribe to get the lastest interviews!

Now, that we have our podcasts on iTunes will be featuring more informative audios that will help you with life after college.

If you have any suggestions for a podcast, either topic or interview, please let us know.

The Most Determined Week Ever

2007-08-17T13:47:44Z

I usually don't write about my personal life on the Real World 101 blog, but I wanted to tell you about a program I'm participating in called The Most Determined Week Ever. The event was started by Michael Simmons of JourneyPage.com to encourage other young entrepreneurs to focus on complete achievement for one week of their life. Each member calls in every other hour of the day, beginning at 6:52am, and shares their goals for that particular hour. During the hour, the members must put away all other distractions and focus on achievement. At the end of the hour, the members reconvene and share their accomplishments.

The greatest aspect of "The Most Determined Week Ever" is that everyone is held accountable for their actions and motivated by other members to go beyond what they normally would do in a week.

I am going to spend the week focused on improve the Real World 101 website and creating the Real World 101 Care Packages.

What will you do to make this week the most determined week ever?

If you want to follow along with the group's progress, visit www.mostdeterminedweek.com. If you are interested in being apart of the event, email me at patricia@realworld101.org, you don't have to be an entrepreneur to participate.

Real World 101 Care Packages: Opportunity to Have Your Say

2007-08-16T16:33:43Z

Sorry for not blogging lately, I've been a bit busy creating the seven booklets for the Real World 101 Care Package.

Now that I've completed writing the first draft of the Home Life Booklet, I'd love to hear your feedback on what I've written. The booklet is about finding where you are going to live after you graduate from college.

Benefits of Being a Reviewer:

Preview of all the useful advice and tools. You get an advanced look at all of the materials that Real World 101 creates for FREE. The value of the Real World 101 booklets total over $100, if you were to buy books on the topics we cover.
Listed in the booklet. If you review any of the booklets you will be listed on the reviewers page in that specific booklet. This is a great resume booster anyone, especially college grads!
Free Care Package. At no cost to you at all, you will receive a care package that includes all of the booklets, tools, and sponsor products.

I mentioned earlier that there are seven booklets in total that I am writing. The upcoming booklet topics are Personal Fianances, Health & Fitness, Career, Travel & Entertainment, Social Life, and Success After College. If you agree to read and review all seven booklets you'll be apart of the "Real World 101 Reviewers Group". Members of the "Real World Reviewers Group" receive additional benefits and gifts for their participation.

If you are interested in reviewing the Home Life Booklet or being apart of the Real World Reviewers Group, please email me at patricia@realworld101.org .

Real World 101 Teleseminar - Wrap Up

2007-07-19T20:37:12Z

The Real World 101 Telseminar on Health Insurance is now available on our free teleseminar page or click here to listen.

In the latest Real World 101 teleseminar I interviewed Spencer Hill of Hill Asset Management. about health insurance. Spencer spoke about the different types of health insurance and how they impact the way you receive health care. Also, some of our callers asked questions about choosing the right health insurance and what to do if you cannot afford health insurance.

Here are some of the discussed topics:

Explanation of the different types of insurance
Insurance for the unemployed and freelancers
How to choose the right health insurance for you
What to do when you can't afford health insurance