Understanding Renters Insurance

1.  Review the lesson introduction (from the OII lesson):

 It's difficult to imagine how many "things" you've accumulated over the years—until you make the move to an apartment. You may be surprised at how much money you've invested in the contents of your apartment—like clothing, computers, stereos, furnishings and sports equipment. Even those jeans that you wear only on weekends have value. Replacing all of your belongings at once would be an enormous blow to your wallet! I mean…you don't want to have to spend all of your pizza money on socks and t-shirts, right?

 Insurance is a means of protecting and softening the economic impact of such a loss. Insurance gives you peace of mind that protects your belongings from certain losses. Of course, you pay a price for this service, known as a premium. Some insurance protects possessions—like renters insurance—and some protects people—that's liability coverage. Don't underestimate the importance of liability insurance coverage. It is just as important for a renter as it is for a homeowner. It provides protection if someone is injured by you or a family member or pet on or off the property.

 Insurance is a way for many people to share the losses of a few. You pay a relatively small payment, known as a premium, in exchange for promises to pay for certain losses that may occur. Premiums, which are paid by you and others, are combined to pay for these losses. Because of this sharing of premiums, no one person has to suffer the whole loss.

 Of course, there are differences in the value of belongings, depending upon their age, condition and value. This is considered in the event of a covered loss.

 Insurance coverage is selected on the basis of the policyholder's needs. A renter is primarily interested in protecting the contents of his or her apartment, and protecting against liability for causing damage or injury to another person or their property. A person with valuable electronic equipment—like stereos and computers - or jewelry, collector's items or similar valuable items may wish to purchase additional protection not found in a standard renters policy.

 Activities: http://www.ohioinsurance.org/renters_insurance/class_activities.htm

 Current Events:  Search local newspapers (or major metro papers on the web) for articles relating to renters insurance. A popular feature is an apartment fire where the tenant didn't carry insurance.

 Personal Property Inventory:  Provide copies of the sample personal property inventory in this section. Have students complete the inventory just for one room in the house—their bedroom is usually an eye-opener. Cost figures can be obtained from catalogs, magazines and the web.

 For a downloadable copy of the Personal Property Inventory, click on this link: http://www.ohioinsurance.org/renters_insurance/images/inventory .

 Cost of Insurance:  Create a scenario—living in an apartment, $30,000 in personal property, etc. Contact a local insurance agent or search the web to obtain quotes based on varying amounts of insurance coverage (both personal property and liability) and deductibles.

 Divide and Conquer: Divide into groups—debate the pros and cons of carrying renters insurance.

 Real Life Cases: Create a variety of apartment living scenarios (single vs. married; expensive lifestyle vs. budget-conscious; replacement cost endorsement carried vs. not carried; insurance purchased vs. not purchased, etc.). Students should be given an insurance "budget" amount and the option to buy/not buy coverage. Create various "life events" that occur (fire, theft, friend trips and falls) to see if the choice they made was the best one.