College Connect: Renters insurance may not cover theft

By Ashlyn Davis

Hayley Ahuja recently called her insurance company to learn if her renter’s policy would replace stolen property.

In recent weeks, Ahuja, a 21-year-old fashion merchandising major at the University of Georgia, noticed some of her items in the common area of her apartment were missing. They turned up again after three or four days, so she feared a roommate was taking these things and worried that something of more value would be taken and not returned.

“I called the insurance company to see if they would be able to help me if something was stolen,” Ahuja said, admitting that she did not understand much about the policy before the call.  “My dad set everything up for me when my apartment complex told me they required all residents to have renter’s insurance,” she said.

Ahuja learned her renter’s insurance policy from United Services Automobile Association (USAA) only covered damage caused by fire or water. It did not cover theft.

Matt Goren, an assistant professor in the financial planning program at the University of Georgia, said such exclusions are actually pretty common.

He said the insurance company’s rationale for this is that it cannot be sure that a policy holder is not lying in order to get money by saying an item was stolen. Some people might have actually sold an item and then also reported it stolen, he said.

Goren explained that students should understand what is included and excluded in their renter’s insurance based on the premiums they are paying for the protection.

He said the primary reason someone would get a renter’s insurance policy is to protect their belongings. The renter would pay a certain amount every month or year in premiums, which will vary based on what the policy will protect. In most cases, things such as your bed or your clothes destroyed in a fire would be covered.

However, Goren warned that renter’s insurance might not be very helpful if you have what he called a “partial loss,” meaning the damage was not greater than your deductible.  This situation might even apply to someone who is paying for their policy to protect against theft.

“Let’s say somebody comes in and steals your laptop. You might go to your renter’s insurance and say, ‘Hey, can you cover this laptop?’ They’ll say, ‘You can file a claim but we have $1,000 deductible,’” Goren explained.

Similar to a health insurance deductible, this means that the renter must pay the first $1,000 worth of damage. Goren said that if the laptop cost $900 then the policy holder would be out of luck getting any money to buy a replacement.

In addition to teaching, Goren co-hosts a radio show called “Nothing Funny about Money” for WUGA-FM and works at the ASPIRE Clinic at UGA, which is described in its brochure as “a unique resource for individuals, couples, and families who are interested in improving their well-being through a variety of affordable sources.”

Ashlyn Davis is a student at the University of Georgia.

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