Lesson Plan:

Renter Insurance
This lesson plan is the collaborative effort of Janet Duncan, John Korte and Gloria Stegemann, of the Missouri
Department of Insurance. For more information on the Insurance Education Initiative, access the following
website: [Link]

Subject: Consumer Economics

Grade Level: 11 - 12

Length: Three Class Periods

Objective: Students will develop a knowledge base pertinent to renters insurance through the
study of core definitions and by taking scenarios and determining the cost to the
consumer and the cost to the insurance company.

Materials: Student - pen or pencil, page of scenarios and worksheets

Teacher - Copies of transparencies, worksheets, overhead projector

Background: Students will have completed the health insurance and auto insurance lessons available
through the Missouri Department of Insurance website, to develop basic insurance
background.

Activities: DAY 1: The teacher will present key terms and basic concepts. Then students will be
grouped to attempt to achieve a monetary total relating to their personal property.
Crossword or Word Search assignment.

DAY 2: Review and correct previous day's assignment. Go over sample scenario in
class, then assign scenario worksheet.

DAY 3: Review and correct previous day's assignment. A small test may be given to
conclude this lesson plan.

Show-Me Standards: For more information access the MO Department of Elementary and Secondary
Education website at: [Link]

Knowledge Standards: Communication Arts (1, 2, 3, 4, 5, 6)

Health/Phys Ed. (6)
Mathematics (1, 3)
Science (8)
Social Studies (4)

Performance Standards: 1-5, 1-8, 1-10, 2-3, 2-7, 3-1, 3-2, 3-3, 3-4, 3-5, 3-6, 3-7, 3-8, 4-1, 4-3, 4-5, 4-6

P.O. Box 690

Jefferson City, MO 65102
1-800-726-7390
[Link]
Don’t
Moving Out
RISK
1 2 3 4
IT Step 4: Cover your home
What your policy covers

So, you’re movin’ out. Goin’ to get your own place. Personal Items
King of your own domain. Do you really need Your stuff at home is covered in case of fire or
Renter’s Insurance? Whether headed out on your theft. Estimate and itemize the dollar value of
own, facing college, or planning a military career, the things you own, once a year. Put that
you need to have your stuff covered with renter’s information in a safe place away from your home,
insurance. like at your parent’s house or in a safety deposit
box in a bank.
Renter’s insurance is designed to protect you from
a total loss of your property. Remember that the Unintentional Damage
best way to learn about your policy is to read it If your candle starts a fire or your roommate is a
completely. bad cook and starts a grease fire and the
apartment complex burns down, there’s a good
If you’re headed out on your own… chance the owner will come after you to pay for
If you had to go out today and replace all the the building. It sure would be hard to pay for a
clothes in your closet, how much would it cost? new apartment building.
Do you have that kind of cash? Your landlord’s
property policy does not cover your TV, your bed, Liability
your clothes, or your CD collection. Pays for personal damage or injuries to others.
•Baseball goes through neighbors window
If you’re headed to the military… •Dog bites (check your policy for
The military probably won’t replace that new $5,000 exclusions)
camera you put in your footlocker, although they
may have alternative compensation. If you have Medical Payments
personal items in on-base housing, you need to So you’re having a party at your new duplex and
check with your superior officers to see how your someone slips and falls on your deck. Most
stuff is covered. You may want to search for an insurance will cover the medical expenses of your
insurance agent in the area. Many companies and visitors.
agents give special rates for military personnel.
Additional Living Expense
If you had a fire and your apartment is getting
If you’re headed to college… fixed, renters insurance will pay for you to stay in
Check your parent’s policy. Most homeowner’s a different place.
policies will cover items away from the home, up
to a certain dollar amount. If you are in doubt You can get additional coverage for a specific
after checking the policy, talk to your parent’s piece of property. Renters insurance policies
insurance agent and ask details about their policy. may limit coverage or exclude coverage on
You may not need a renter’s policy…. BUT, be certain types of valuables. If you have
careful about that first move into your own something of particular value, for example, over
apartment. If you move off campus, you may not $500, you will want to make sure that the
be covered by your parent’s policy. company covers it. If not, look into getting a
separate endorsement for that valuable item.
What you should know Simple Lesson

Proof of Loss: When you have a claim you must be Your neighbor above you installs a hot tub, but
able to prove you had a loss. You’re going to have your lease says you’re not allowed to have hot
to produce some kind of proof of ownership. This tubs. It breaks and leaks into your apartment!
is why Mom always says – “Keep your receipts”!
1. Your neighbor might be liable for the damage
Deductible: a clause in your insurance policy that to your stuff, but refuses to pay for anything. If
states you will pay a specific amount of a claim you have renter’s insurance and your neighbor
before the company pays. The higher your deductible, doesn’t have insurance, who pays for your stuff
the lower your premium. to be fixed?

Actual Cash Value (ACV) Policy: ACV is the current 2. Now, what is the answer if neither of you have
value of your TV if you sold it in the newspaper insurance? Who pays for your stuff?
today.
•TV purchased in 1995 = $350 3. What if you were the neighbor with the hot tub
•TV value today (ACV) = $50 and no insurance? Can you afford to pay for the
damage to your apartment plus someone else’s
Replacement Cost (RC) Policy: RC is the amount damaged apartment?
that it would cost you to go out and buy that
same TV in the store today. Let’s estimate the current dollar value of your
•TV purchased in 1995 = $350 bedroom.
•TV replaced today (RC) = $575 1. Clothes: if you had to replace your entire
wardrobe how much would it cost?
Replacement cost policies typically cost more than Remember coats, shoes, hats, ect.
actual cash value policies. $_______________
2. Bed, Dresser, Furniture, Lamps
$__________________
Get the facts 3. TV, Computer, Stereo, CD’s, DVD’s
$________________
4. Pictures, Rugs, Paint $_______
Small Claims Can Hurt 5. TOTAL $_____________
Your property is stolen and was worth = $350 cost you!
Renter’s Insurance policy has a deductible = $250
pizzas per month, Insurance sounds better than what a lawsuit may
do, unless you get a lawyer or a nice neighbor. 3. For the price of 2
Your insurance company pays you = $100 company would go after your neighbor to get reimbursed. 2. You
[Link] insurance company pays you for your damage and your

The severity of a claim does not matter to some Answers:

insurance companies, simply the number of claims.
Most insurance companies will look at your claims
record from the previous 5 years.

Many companies will not insure those who have

had 2-3 claims in 3 years, no matter the dollar
amount of the claims.

Discounts with Auto Insurance

Most companies have big discounts on car
insurance if you have a renter’s policy with them.
Sometimes the savings is large enough that it
covers the price of the renter’s insurance.

P.O. Box 690

Jefferson City, MO 65102
1-800-726-7390
[Link]
Renter Insurance :

You're getting closer, and closer to

graduation all the time…

So whether you are heading out to

. . . college

. . . the military

. . . or out on your own

Renters Insurance may be the most

important thing to have!
Key Terms:
Proof of Loss: verification of purchase (date of
purchase, purchased from where, purchase
amount).

Deductible: an agreed upon amount, between

you and your insurer, that you will pay before
the insurance company pays anything.
(Can be negotiated, at the time of insurance
purchase, to make your premium lower . . . the
higher the deductible, the lower the premium).

Actual Cash Value (ACV): the current value of

an item. (It's what you would get for something
if you would try to sell it in the paper).

Replacement Cost: the cost of an item, if it is

replaced new from the
store.

Depreciates: the value of an item goes down

with time.
Estimate the value of your stuff:
Clothes $__________
(PJs, socks, shoes, jeans, shirts, etc.)

Bedroom furniture $__________

(Bed, dresser, nightstand, lamps, etc.)

Electronic Equipment $__________

(TV, computer, stereo, CDs, DVDs, etc.)

Decorative $__________
(pictures, lighting, rugs, etc.)

Grand Total $_____________

Scenario:
John has the following renter insurance policy:

• $250 deductible
• $30,000 Personal Property Limit
• $2,500 Special Limit for Certain Property
• $100,000 Liability

John moved out of the dorms into an apartment with his

friends, Chris and Randy. After talking to an insurance
producer, John decided to carry renter insurance on his stuff.
He gave the producer the following list of items to be
covered:

• Clothes - $8,000
• College books - $2,000
• Couch - $150
• Coffee table set - $100
• Lamps - 3 @ $25 each = $75
• Bed - $200

Chris & Randy owned the $900 35-inch TV, $2,000 stereo,
and $3,000 computer along with their beds, books and
clothes, but they decided that they did not need insurance.

While on break from school, Chris had a grease fire in the

kitchen, and everything was lost.

• How much did John pay?

• How much did Chris & Randy pay?
• How much did the insurance company pay?
Break it down:
John Insurance
Pays Co. Pays

$250 Deductible $0
$0 Clothes $8,000
$0 College Books $2,000
$0 Couch $150
$0 Coffee table set $75
$0 Lamps $75
$0 Bed $200
$250 Total $10,525

Chris and Randy ended up with

nothing. They did not insure what they
had and don’t have the money to
immediately replace all of their stuff.
Scenario Worksheet:
POLICY LIMITS (for all of the following scenarios):

Liability $100,000
Personal Property Limit $30,000 (replacement cost)
Special Limit for Certain Property $2,500
Deductible $250

1. Ricky moved into his own apartment right after high school. He got a good job as a forklift operator
in a local warehouse. With his extra money, Ricky liked to "invest" in his competition stereo, which had
components that he could easily remove from his car. Last week, Ricky moved the stereo from his car
and put it just inside his front door. That night, thieves kicked in his door and took the first expensive
thing (the stereo) they found and ran.

Since these parts were not permanently attached to his car, the Renters Insurance Company would
cover them. The value of Ricky's competition stereo was $7,500.

• How much did Ricky pay?____________________________________________________________________

• How much did the insurance company pay?___________________________________________________

• What needs to be considered or changed about this situation in the future?____________________

_____________________________________________________________________________________________

2. Debbie likes to sit on her patio and sip lemonade in the back yard of her duplex. One night her patio
furniture was stolen from her back yard. Feeling hurt that someone stole from her, Debbie filed a
police report and called her insurance company to file a claim. The claim she filed was for the
replacement price of the patio furniture at $400.

• How much did Debbie pay?__________________________________________________________________

• How much did the insurance company pay?__________________________________________________

• What needs to be considered or changed about this situation in the future?___________________

____________________________________________________________________________________________

3. Courtney and a couple of friends are renting a house near campus to save money and cut expenses,
while going to college. Courtney decided to cook her boyfriend, Bobby, a Valentine's dinner. It turned
out to be a little more than she could handle, and the end result was a fire in the kitchen. All major
kitchen appliances were lost, the rest of the apartment experienced smoke and water damage. The
total cost of the claim was $27,500.

• How much did Courtney pay?________________________________________________________________

• How much did the insurance company pay?___________________________________________________

• What needs to be considered or changed about this situation in the future?____________________

_____________________________________________________________________________________________
Answer Key:
POLICY LIMITS (for all of the following scenarios):

Liability $100,000
Personal Property Limit $30,000 (replacement cost)
Special Limit for Certain Property $2,500
Deductible $250

NOTE FOR TEACHER:

Make sure that students know that additions to a policy are known as "riders". Riders are optional coverages
that can be purchased along with the basic coverage. Remind students that they should check to see if the
personal property coverage has been issued on a "replacement cost" or an "actual cash value" basis.

1. How much did Ricky pay? $250

How much did the insurance company pay? $2,500
What needs to be considered or changed about this situation in the future? He should have gotten a
rider to his policy to insure that his competition stereo equipment was covered.

2. How much did Debbie pay? $250

How much did the insurance company pay? $150
What needs to be considered or changed about this situation in the future? Insurance companies are
sensitive to frivolous claims, and may cancel the policies after one or two claims. Is it worth it?
Probably not.

3. How much did Courtney pay?$250

How much did the insurance company pay? $27,250
What needs to be considered or changed about this situation in the future? While this was a valid use
of the liability portion of her policy, the company may cancel the policy after its paid. Is it worth it?
Yes.
PLEASE MAIL TO:
Missouri Department of Insurance, Financial Institutions, Missouri Department of Insurance
PO Box 690
& Professional Registration Jefferson City, MO 65102-0690

Insurance Education Initiative [Link]

Teen Worksheets and Lesson plans - Educator Survey 800-726-7390

The Missouri Department of Insurance, Financial Institutions, & Professional Registration supports the use of educational
insurance programs for Missouri youth. Teaching teens & young adults the importance of insurance coverage will further
prepare them for life’s journey. DIFP realizes that one of the best ways to teach teens about insurance is in the
classroom. Please provide your feedback to for the insurance educational material used in your classroom.

Your Name__________________________________________________________________________________
Name of your school __________________________________________________________________________
Subject or Class and Grade Level with which you used this material __________________________________
_____________________________________________________________________________________________
Email and/or phone number ___________________________________________________________________

Check all that apply:

DIFP Lesson Plan used Supplemental DIFP classroom material used
‰ Health Insurance Lesson Plan ‰ Teen Insurance Crossword Puzzle
‰ Auto Insurance Lesson Plan ‰ Teen Insurance Word Search
‰ Renters Insurance Lesson Plan ‰ Teen Renters Ins Crossword Puzzle
‰ Teen Renters Ins Word Search

What are the other insurance educational materials you use in your classroom?
Examples of other insurance material may be M.I.E.F.'s CD or DESE’s Family/Consumer Resource Management [#40-3109-I]
_______________________________________________________________________________________________________
______________________________________________________________________________________________

Did you use any DIFP Teens worksheets (General, Auto, Health, Renters) in your classroom, other than the one included
with your lesson plan?
‰ Yes
‰ No
Please rate the educational value of the DIFP material used in your classroom.
‰ 1 (High)
‰ 2
‰ 3
‰ 4
‰ 5 (Low)
How did your students react to the lessons taught?
‰ Excellent
‰ Good
‰ Poor
Additional comments or recommendations:
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________

Thank you for your input about the DIFP Insurance Education Initiative.
For more information contact us at 1-800-726-7390 or email us by going to
[Link] then Ask MDI then Teen info
The DIFP Teen worksheets can be found at [Link]