When you’re packing for college, you may be thinking more about clothes, gaming consoles or the perfect laptop than insurance. Whether you’re heading to a campus dorm, renting a house or leasing an off-campus apartment, it’s important to protect your possessions.
Don’t make the mistake of thinking you’re too poor to need coverage. Many students have personal items – such as electronics, furniture, sporting equipment and clothes – worth thousands of dollars. Plus, college parties are prime opportunities for trouble, including injuries to a guest or property damage to your place.
What renters insurance covers. A common misconception about renting is that the property owner is obligated to reimburse you in the event of a catastrophe, such as a theft, fire or storm. As empathetic as your landlord may be, his or her insurance never covers you.
In other words, it’s your problem if something valuable is stolen from your rental, or you return to discover your possessions destroyed by a fire. It’s not a pretty picture – or an affordable one – especially for a college student.
Fortunately, renters insurance is a bargain for the protections you get in a basic policy:
- Personal property. Protects the value of your belongings from a covered event anywhere in the world, such as damage from a natural disaster, loss or theft. Common exceptions include flooding and earthquakes.
- Liability. Protects you against a claim or lawsuit if you accidentally hurt someone, or a visitor is injured in your rental.
- Additional living expenses. Pays for temporary housing and meals if you can’t live in your rental while covered damages are repaired.
How to know whether you need renters insurance at college. Whether college studentsreally need renters insurance depends on where they live and the protections extended to them under a parent’s policy. If you attend college while living at home, you’re generally covered by your parents’ homeowners or renters insurance.
If you live in on-campus housing, such as a dorm or a school-owned property, your parents’ home or renters insurance typically extends to you if you’re listed as a dependent on their policy. However, both types of policies cap off-premises coverage.
Let’s say you’re a parent of a college student and get a frantic call from your daughter who’s upset because her high-end mountain bike disappeared from her dorm room. If you have homeowners insurance with $50,000 coverage for personal property, you may only get up to 10 percent for off-premises coverage after paying the deductible.
However, if you set up your daughter in an off-campus apartment or house, your homeowners or renters insurance wouldn’t cover the loss. She would need to have a policy in her name to cover losses or liability claims.
If a student lives off-campus with one or more roommates, they may be able to purchase renters insurance together. While sharing a policy can save money, there are downsides. One is that your roommate’s claims go on your claims history record as well, which may cause you to pay more at renewal. Problems can also arise when a roommate moves out or doesn’t pay her share of the premium.
How to shop for renters insurance. You might be surprised that the average renters policy costs just $188 per year. That’s a cheap financial safety net that no renter should go without.
Be sure you understand whether a policy offers cash value or replacement value for claims. The former reimburses you for the value of personal belongings at the time of a claim (the original value minus depreciation) and the latter gives you the full value.
Premiums for replacement coverage are higher than for cash value, but they may be worth it if you have a substantial claim.
Use these three tips to find the best policy:
- Talk to your current insurance provider. If you already have an auto, home or renters policy, find out whether your student can be covered and at what cost.
- Ask your school for advice. Many colleges and universities have relationships with insurance companies that allow students to get discounts.
- Shop around. Get quotes from several insurers by using comparison sites such as insuranceQuotes.com and netQuote.com. Be sure to shop apples-to-apples by evaluating prices for policies that have the same benefits and coverage limits.