By Brooke Stocco

Caroline Ahumada, a senior computer science major at the University of Georgia, lives in a rented house, but opted out of buying renters insurance by default. Like many young adults, Ahumada’s knowledge of insurance products is minimal at best.

“Renters insurance? Am I supposed to have it? Isn’t that like super expensive?” asked Ahumada.

Because she wasn’t required to have it as part of her rental agreement, Ahumada wasn’t forced to learn about it or explore her options. She is not the only young adult confused about renters insurance. Thirty seven percent of millennials said they did not have renters insurance because they don’t know how it works, according to a 2016 survey for completed by Princeton Survey Research Associates International.

Like Ahumada, many young adults overestimate the cost of renters insurance. Twenty-nine percent of consumers ages 18 to 29 guessed that renters insurance costs $1,000 a year, according to data from the National Association of Insurance Commissioners.

But a student in Athens, Georgia, can expect to pay about $15 to $20 a month for coverage, or less than $250 annually, said Kathryn Miller, an insurance representative at the Farmers Insurance branch in Athens

She said that the decision to get renters insurance is usually an easy one, once renters know what it does and how much it costs.

“It does two things — it covers your personal belongings so that if there was storm damage or a fire or someone came in and stole things, it would replace your belongings, minus whatever deductible you choose. There’s also liability coverage, so for example, if one of your friends fell on your property and got hurt, they would be covered,” according to Miller.

Policyholders should expect to have a $500 or $1,000 deductible. The deductible amount partially depends on how many previous claims have been filed on the property that the policyholder rents. For example, if the previous resident of Ahumada’s house filed a claim in 2017 or later, she should expect to pay a higher deductible.

“If a claim was made at the place you’re renting in the last three years, even if you didn’t file it, you should probably expect a $1,000 deductible,” said Miller.

Miller noted that if you get hurt on your own property, that won’t be covered by renters insurance.

Even Ahumada, who doubted her ability to pay for it, acknowledged that the benefits can far outweigh the cost if you end up using it. She said there are several trees around her house and that “all it would take is one falling to really make me regret not getting insurance.”

Though the landlord’s insurance policy would cover the house repairs under such circumstances, she would only get compensated for her personal belongings through her own renters insurance policy.

Not many students, or renters in general, know exactly what “personal property” means in the context of insurance, which discourages them from getting a policy, according to Miller.

“Basically, if you were to take where you’re living at, turn it upside down and shake it, everything that falls out is your personal property and that’s all covered,” explained Miller.

Some insurance policies will cover personal belongings when the policyholder is on the go, according to Lemonade, an insurance company specializing in coverage for urban residents. For example, if someone stole Ahumada’s laptop and backpack when she’s in the restroom at the science library, her belongings would be covered.

“I had no idea that renters insurance would cover my stuff outside of my house. I guess I didn’t realize how little I knew about it at all,” said Ahumada.

Brooke Stocco is a journalism student at the University of Georgia. The reporting for this article was completed before the campus closed due to the COVID-19 pandemic.