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Waking up to the sound of a fire alarm blaring and opening my dorm room door to the sight of hundreds of gallons of water pouring from the sprinkler systems was nerve racking for sure, but when I looked for smoke and sign of fire, my nerves turned to confusion. This wasn’t a life-threatening emergency but rather a simple accident caused by some dorm mates throwing a football in the hallway and knocking off a sprinkler head.
Nevertheless, my roommate and I used every towel we had to slow the water coming in and we scrambled to get our computers off the floor and any personal items out of risk. Thankfully, the water stopped short of doing any damage, but it made an impact on me and thinking about my personal belongings and budget. If my computer, TV or even my clothing were damaged, would I be able to replace it all?
Fast forward nearly 20 years, and the costs for things like computers or cell phones have increased substantially alongside other personal belongings. According to a recent study1, the average net worth of 18-21-year-old Americans ranges from -$8,800 to -$38,900 largely due to student loans and other debt accumulated while trying to complete school. So, in the event of a simple accident or a real emergency, most college students would likely pile on more debt or be forced to borrow from family to replace their things.
This is why renters insurance can be so important, but it does more than just replace your stuff. It can also help protect you or your parents from being financially responsible for injuries or damage to others that you are liable for. Additionally, it can help cover cost associated with being displaced from your home, like hotel and food costs.
Some colleges require renters insurance to be carried, and landlords at an apartment complex or rental home may require it as part of your lease agreement. The insurance typically caries a low deductible and a low monthly premium.
Staying on track or getting started out right financially is important at a young age. Becoming dependent on credit cards and carrying debt can be burden that makes your everyday life more stressful. Taking action on simple things like renters insurance can help give you peace of mind and protect your belongings so you can focus on what you need to without worry of a poorly tossed football creating a lasting effect on your finances.