A tree branch that struck Trever Verba's car during January's "freak" ice storm did not cause enough damage to make him feel the need to insure his rental home possessions for the coming winter.
"I don't feel the need for insurance because things like this rarely happen," Verba, a Ball State University junior who lives on Abbott Street, said. "I've never seen anything like that before. Even if I saw something like this happening again, I wouldn't get insurance because I didn't have any damage. I don't know anyone who had any damage other than power lines down."
Junior Brad Underwood, however, has had renters insurance for three years. He decided to buy insurance for his personal belongings when his car insurance agent recommended it to him.
"A buddy of mine got robbed his freshman year, and they lost a lot of their stuff," Underwood, who lives on Everbrook Lane near Silver Tree Apartments, said. "I hung out there all the time, so it just seemed like a good idea."
Unfortunately, only about one in 10 Ball State students purchase renters insurance to cover their personal belongings in the event of a natural disaster, fire, theft or other loss, Ball State graduate Charlie Paul, account executive for Old National Bank's northeast region, said.
According to a 2003 poll conducted by the Independent Insurance Agents and Brokers of America, 64 percent of respondents living in rental homes did not have renters insurance.
"A lot of them just don't want to spend money," Paul said. He graduated from Ball State in 2003 with a minor in insurance and risk management.
But saving up about $200 to $300 per year for renters insurance would be enough to cover a student's personal belongings if damaged by fire, theft, water damage, wind damage, a tornado, lightning, an explosion or an ice storm, depending on the type of damage, Paul said.
"That would be adequate for anything the typical college student would have," he said.
COST AND OPTIONS
Carol Paul, Charlie Paul's mother, is a senior account executive at Muncie's United Insurance Agencies Inc. She said a reasonable premium for coverage was $15 per month. This fee provides coverage for personal contents, as well as liability protection in case a student causes a fire or other accident in which he or she could be held negligent for bodily or property damage, Carol Paul said.
"If you're in a one-family residence, the most damage you can do is to that one residence," she said. "If you're in an apartment complex, you could do more to the building exposure."
Students have two replacement value options if their belongings are damaged or stolen: "actual cash value" or "replacement cost coverage." Actual cash value means students would receive money based on the depreciated value of their items. Carol Paul said she recommended replacement cost coverage.
"(Replacement cost coverage) means their contents would be replaced with the same like, quality and kind as they had before, if they replace it," Carol Paul said. "There is a stipulation; they have to replace it in order to get paid."
Although water damage is included in the policy - for example, when frozen pipes burst and ruin personal belongings - floods are excluded from the renters insurance policy, Carol Paul said.
"If you're living in a dwelling that got flooded or had water leakage coming in from sewers and drains, that's something that would be excluded," she said.
Many students who live off-campus already have coverage under their parents' homeowners insurance policies. However, several people overlook one clause in the policy that prohibits the tenant from being gone for more than 45 days prior to his or her loss, Carol Paul said.
Most residence hall students are also covered under their parents' homeowners insurance policies, Alan Hargrave, director of Housing and Residence Life, said. The university, however, provides information about companies that specialize in students' insurance for those who are not covered on their family's plan.
"I would encourage everyone to check out the reputation of the company and go from there," Hargrave said.
LANDLORDS' INVOLVEMENT
Charlie Paul said landlords are required to insure the buildings they own, as are property owners who have a loan on their property. However, a student's belongings are not the landlord's responsibility, he said.
"It's really none of their business," Charlie Paul said. "They are generally getting their money, and they don't really care about renters' belongings. They're not going to have to pay for it or anything."
Carol Paul, who has been in the insurance business for 28 years, said she would like to see more landlords require their tenants to purchase renters insurance. During her four years as a landlord, she required the tenants of a four-bedroom house on Ashland Avenue to buy renters insurance as part of their lease.
"I would say it's getting to a point where more are requiring it, but we are still a long way [away]," Carol Paul said.
Eldon Buck, director of the University Area Landlord Association, said landlords recommend that students buy renters insurance but do not require it from them. Insurance companies would embrace such a requirement because it would mean more business for them, he said.
"Some students can't afford it," Buck said. "We can't require it. We've suggested it, but it's the student's decision."
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