Dear Ethel,
I don’t really own that much stuff so do you think I should bother getting insurance? One of my flatmates was talking about it and I don’t know whether I need to or not. Is it worth it?
- Uncovered
Hell yeah! You might not want to part with your little student funds but insurance is worth it. If you’ve signed a joint (and severally liable) lease, you can be held financially responsible even if one of your flatties damages the house while you’re on holiday with your girlfriend in Gore.
For example, your flatmate leaves a candle burning, there’s a fire, and half of the house is gutted (but thankfully you’re all OK). Your flatmate has scarpered back home to Quebec and left you to face the owner of what is now only half a house. If you don’t have personal liability insurance, you could be asked to pay part or all of the costs of repairs. We’re not talking lunch money - we’re talking six figures - hundreds of thousands!
Not all insurance companies are equal. You’ll have to get busy on the interweb or ring around to ask some questions. Firstly, work out how much the stuff you own is worth. Let’s say you own $5,000 worth of stuff. Some insurance companies say that you have to take out insurance for a minimum of $20,000 worth of stuff. So, shop around and find someone who gets closer to $5,000 because their premiums will be cheaper.
Next, you need to find out what excess you have to pay. Ask what happens if things are stolen? Does the excess go up? Is theft always covered? Does the insurance company replace old for new…so your two year old surfboard gets replaced with a shiny new model and not a piece of Trade Me junk? Do they cover bikes? Glasses (from the optometrist, not beer)? How much is covered for personal liability (you want no less than 1 million)? What is the cost of premiums? If you don’t have much gear, you should be able to get cover for about six bucks a week. $6! Totally worth it when you think of getting a bill for $500 000 after your flatmate scarpers and you realise that you should have taken out insurance after all.
Feel free to drop into 5 Ethel B or email help@ousa.org.nz if you want any more info or need a hand with working out what’s best for you.
Whole lotta love,
-Ethel