{"id":3253,"date":"2017-10-18T15:27:28","date_gmt":"2017-10-18T15:27:28","guid":{"rendered":"http:\/\/wordpress.lvc.edu\/wordpress\/lavie\/?p=3253"},"modified":"2017-10-18T15:27:28","modified_gmt":"2017-10-18T15:27:28","slug":"unsure-on-insurance","status":"publish","type":"post","link":"https:\/\/wordpress.lvc.edu\/lavie\/2017\/10\/18\/unsure-on-insurance\/","title":{"rendered":"Unsure on Insurance"},"content":{"rendered":"

Written by John Regan, former Director of Sales, for equity research<\/em><\/p>\n

Question: <\/b>I had a scary moment on campus the other day when I couldn\u2019t find my car. I was convinced that it had been stolen. It hadn\u2019t, of course – I\u2019d just forgotten where it was! But still, it made me wonder how I\u2019d deal with losing something so valuable. My insurance doesn\u2019t cover vehicle replacement. I don\u2019t have any other insurance except, I think, for health insurance – but I don\u2019t really know how that works, either. Should I have insurance on my dorm room? My computer? I can\u2019t afford to pay thousands if someone breaks into my room or wrecks my car. Will insurance bring me peace of mind? Help!<\/i><\/b><\/p>\n

Answer: Insurance can seem complicated, because there are so many different policies and so many different regulations. But, of course, all insurance works in essentially the same way: a company offers a large number of people the chance to pay a small regular rate in exchange for a type of coverage. If a customer has an issue that is covered by the policy, the company draws on some of the money it has generated to help the customer pay for expenses related to the problem. The customer may still be expected to pay an amount up front (before the insurance kicks in) or share a percentage of the cost with the company as money is spent. You probably already know the terms for these things: the regular rate is a \u201cpremium,\u201d the amount a customer has to spend before insurance kicks in is a \u201cdeductible,\u201d and shared costs are \u201cco-pays.\u201d<\/p>\n

If the insurance company does the math right, it can provide a valuable service while still keeping a profit for itself. And these companies do profit and grow: the insurance industry wrote $1.2 trillion<\/i> in policies last year<\/a>. A trillion is a million millions, written as a one followed by twelve zeroes!<\/p>\n

You almost certainly already have some insurance coverage. For instance, you mentioned that you had a car, and that means you must have car insurance (the law requires it). You are also required, as of this writing, to have health insurance.<\/p>\n

Homeowner\u2019s insurance is, as the name implies, for homeowners. But homeowner\u2019s insurance typically covers more than a physical home; according to one modern luxury appliance retailer<\/a> it will also cover the more expensive things in your home, from luxury kitchen appliances and other built-in systems to personal belongings like clothes or collectables. Homeowners tend to have homeowner\u2019s insurance: an incredible 95% do, which works out to around 70 million insured homes<\/a>.<\/p>\n

But you live in a dorm, not a home that you own. Can you get insurance that covers the things in your space? In fact, you can: renter\u2019s insurance is the policy that would apply here, and it covers things inside of your space in a way that is very similar to homeowner\u2019s insurance. Interestingly, renter\u2019s insurance is not as popular as homeowner\u2019s insurance. 41% of renters carry coverage<\/a>, compared to the aforementioned 95% of homeowners.<\/p>\n

Before you buy renter\u2019s insurance, though, call your parents. Some homeowner\u2019s insurance policies extend coverage to policy holders\u2019 kids and their dorm rooms<\/a>, so you may already be covered and not know it! This is less likely to be true of off-campus apartments.<\/p>\n

Insurance is often sold through brokerages, and while some brokerages cover a wide range of policy types, there are also those that provide single types of niche insurance offerings. According to one such niche broker at OurLifeCovered<\/a>, focusing on such a hyper-specific type of insurance gives them a much better understanding of the needs of the individual policy holders and allows them to make much more targeted recommendations for them. In many cases, it is also possible to buy insurance directly from providers.<\/p>\n

We have spoken so far about policies that reimburse you, but you do not have to be the benefactor of your own insurance policy. With life insurance policies, policyholders pay premiums in exchange for coverage they will not be around to see. Life insurance is designed to support loved ones and to cover things like funeral costs and lost income. It is popular among breadwinners and providers. That is no surprise given that 70% of households with children under 18 would have trouble with living expenses within months after the death of a breadwinner<\/a>.<\/p>\n

While we cannot make any specific recommendations for your situation, you should know that insurance companies are experts at calculating risk. The limited amount of things you have in your dorm room (which campus security helps to protect) will cost less to insure than a large amount of valuable things in an unsafe area. You may want to look into renter\u2019s insurance to gain the peace of mind you mention in your question.<\/p>\n

\u201cA man\u2019s home is his castle.\u201d – Proverb<\/i><\/p>\n

 <\/p>\n<\/div><\/div>","protected":false},"excerpt":{"rendered":"

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