FOOL'S SCHOOL DAILY Q&A

Renter's Insurance

Q: Is renter's insurance a good idea, even if I don't have a lot of stuff to insure? -- P.G., via the Internet

A: Hi there, P.G. Renter's insurance protects your stuff against theft, fire, internal explosion, vandalism, malicious mischief, riots and aircraft -- among other things. That's right, if a 747 should happen to plunge through your roof and rain chaos down about your head -- relax! Your laptop is covered. Similarly, when the baseball bat-wielding, wild-eyed hordes are lofting Molotov cocktails up through your window and screaming the latest slogans -- relax! Your stereo is covered!

What the insurance people will tell you is that you're basically buying peace of mind. How much is this peace of mind going to cost you? Well, something on the order of $150 a year for the minimum amount, which is generally $25,000 in coverage. If you're like most students, that ought to be enough. You don't really have more than $25,000 worth of stuff in your apartment, do you?

Ah, but there's more -- it doesn't just stop at your door. Included in the price is usually $100,000 of personal injury liability coverage. Say you go to a bar, get into a fight and you break someone's jaw, and they hold you liable. That's covered, up to $100,000.

Say you go traveling and you lose your luggage. You guessed it -- you're covered, for personal items that are either on- or off-premises! You fill out a police report and let the insurance company know about your loss. Careful, though: You may just be covered for the depreciated amount. If you have a Fool ball cap for which you paid $12.50 in that lost suitcase, you might only get $3 back for it. Unless, of course, you made sure that your policy covers the replacement cost. In that case you'll get the full $12.50 back. The replacement cost feature will set you back about an extra $20 for the policy, but it may be worth it. (Keep in mind that these policies usually come with a $500 deductible. This means that you'll have to pay the first $500 of your loss; they'll cover the rest. You can get a lower deductible if you're willing to pay more for the policy.)

If you've got a roommate, you can't just split the cost of renter's insurance and consider yourselves both insured. Each of you (technically) has to have his or her own policy, unless you're living together as domestic partners. Likewise, before those of you with impure thoughts begin scheming of ways to pretend to lose your luggage, remember that insurance fraud is a felony. Shame on you!

So now we're ready to answer the question of whether you need it. If you have expensive equipment lying around your room, if you're a type A personality and tend to get in lots of violent fights, and/or if you travel a lot and are disorganized with personal possessions, then get the insurance. You're bound to need it one way or another. If not, simply consider the value of your stuff vs. the price you'd pay out each year in premiums.

WHAT NOW? Travel broadens the mind. Why not take the plunge, put your fears to bed and go on a trip next summer? You can go pick grapes in the south of France, or olives in Greece. Oh, and if you want to find a list of insurance companies, you'll find one at www.nfsn.com/Insco.htm.

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