A Lesson in Disaster-Proofing Your Life

What students can do to protect their valuables - a lesson in financial literacy

What can students do to protect their valuables?

November is Financial Literacy Month and while it’s great that an entire month is dedicated to raising awareness about how Canadians can better manage money, it’s important to remember that there is no off-season when it comes to personal finance.

As a millennial money expert, I’m going to do my best to deliver the financial goods not only in November, but throughout the next few months!  Stay tuned for topics such as the impact of emotional spending, travelling without going broke, and how to get more of your money back from the tax man.  Today, were going to look at the importance of tenant insurance for students.

You know what sucks more than paying $15 per month?  Having all of the stuff in your apartment or dorm room disappear without anything to show for it.  You know what’s even worse?  Having one of your possessions cause physical damage to another person or their property, and being found responsible to the tune of a $100,000+ penalty.

Insurance is about disaster-proofing your life for a small fee every month.  This monthly cost is referred to as a premium and it’s used to spread out the risk of a long-shot occurrence, over a large group so that no single person has the situation mentioned above happen to them.  In order to make sure you disaster-proof your belongings as a student, you should look into contents insurance.  It is also often called renter insurance or tenant insurance.

When it comes to students and their belongings many people incorrectly believe that a landlord’s house insurance would cover their stuff in the event that a fire, theft, water damage, or a liability situation occurs. The reality is that the landlord’s insurance typically covers only the actual building and their liability – your stuff is your concern.  The good news is that many students are covered on their parents’ home insurance plans; however, this isn’t always the case.

It’s important to check the fine print in your parents’ home insurance policy before your university move-in day.  Each company has slightly different policies in regards to covering students after they leave home.  Some companies only cover $10,000 worth of damages, while others have a liability component built in, and finally, there are some policies that don’t cover children who move out at all.  A quick confirmation call to the insurance company can save a lot of headaches down the road if you’re not sure about the specifics of your parents’ policy.

When it comes to protecting against the loss of a student’s most valuable belongings, the main concerns are usually computers and other tech-related gadgets.  Other common items include jewellery, furniture, and sports equipment such as golf clubs.

If you want to really rest easy at night, the best insurance tip I’ve ever gotten is to keep an itemized list of valuables in whatever cloud platform you prefer.  Make sure you include serial numbers as well.  This can make your life a while lot easier at a time when you will likely really need to catch a break.

If your parents’ home insurance policy doesn’t cover you and you decide that you can’t afford to pay the equivalent eating out once a month in return for disaster proofing your life, you leave yourself extremely vulnerable.

There are multiple websites that now allow you to comparison shop contents insurance policies in mere seconds, so there’s really no excuse not to see what is available.  For somewhere in the neighborhood of $15 per month you should be able to snag both replacement insurance for any items that are damaged (assuming you’re an “average” student and haven’t amassed a horde of valuable treasure yet) and a liability policy that covers you for $1,000,000 or so.

In my experience, there aren’t many other places in life where $15 or so can buy you that kind of peace of mind.

Kyle Prevost

Kyle is a teacher by day and personal finance blogger by night. When he isn't limping up and down a basketball court, you can catch him on his soapbox at Birtle Collegiate or providing the answers to Gen Y’s questions over at YoungandThrifty.ca and MyUniversityMoney.com. He is also the co-author of a critically-acclaimed book for Canadian students: More Money for Beer and Textbooks and has written for several of Canada's premier publications including the National Post, Globe and Mail, and Metro News.

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