If you are sending your child off to college this fall, you probably realize that your life is about to change. You might not realize that your insurance needs change as well. Here’s what you need to know about insuring your college student’s belongings.
Take a peek inside a typical college student’s room: you’ll probably find a laptop, a smart phone, a television, a bike, clothing, jewelry and furniture. Altogether, most students bring thousands of dollars worth of property to school.
If your student is living on campus, her property is probably covered by your home owners insurance policy. However, most policies do not cover the property of students living off campus. In either case, you will want to make sure your child’s valuables are insured.
Student property insurance
College students can buy insurance designed specifically to protect their personal property. This insurance has several attractive features:
- Low deductibles: While homeowners deductibles generally range from $500-$2,000, student policy deductibles can be as low as $25. If your student’s $1,000 computer is stolen, he could receive $975 to replace it.
- First dollar payment: Even if your student’s possessions are covered by your
homeowners policy, the student policy pays the claim. Your own claims history is not blemished by your child’s loss.
- Worldwide coverage: This is important for students who plan to study or travel overseas.
Student property policies have limitations. Unlike most homeowners policies, they do not cover lost items — only stolen property, confirmed with a police report. Additionally, the policies do not have liability protection, which is standard in homeowners policies. This coverage costs about $125 per year for $5,000 in coverage with a $25 deductible.
Renters insurance is worth considering if your child is living off campus. It covers personal property that is lost or stolen and also provides liability protection if someone is injured while in your student’s residence.
Policies generally cost between $15 and $30 per month, depending on the location and size of the rental unit and the value of the possessions insured, according to the National Association of Insurance Commissioners. As with homeowners insurance, you pay a larger premium for a lower deductible. Sometimes, roommates can buy one policy that covers everyone in the rental property.
You need to know whether you are buying “actual cash value” or “replacement cost” coverage. With cash value coverage, the insurer will settle a claim for a lost laptop for a depreciated amount. With replacement cost coverage, your settlement pays to actually replace the computer. You pay only the deductible. Replacement cost coverage costs more, but will provide a higher settlement for property claims.
You should note that some policies have separate, lower limits for valuable items such as jewelry, antiques and electronics. If your child’s renters policy doesn’t provide adequate coverage for his or her electronics, you can buy additional coverage by “scheduling,” or itemizing, this property separately.
Be aware that auto rates may be significantly different in the city or state where the school is than, so you’ll want to consider whether it makes sense to keep the car on your policy or buy a new policy.
Identity theft costs victims more than $5 billion each year. College students are especially vulnerable because they are more open to requests for personal information. (Think Facebook.) Your homeowners policy may already cover you and your family for the costs of reclaiming your identity. Give us a call and we’ll confirm your coverage or give you information about adding it.
Protecting your property
The Insurance Information Institute recommends several things students can do to help recover lost items and lower the odds of a theft.
- Leave valuables at home. Do not take unnecessary items such as expensive jewelry.
- Create a dorm inventory. See www.knowyourstuff.org for a free online inventory program sponsored by the Insurance Information Institute.
- Engrave electronics with the student’s name.
- Lock the door. Insist that roommates also lock the door to a dorm room or rental unit.
- Use a laptop security cable.
- Beware of scams. Encourage your child to talk to you before buying anything that requires advance purchase or providing a Social Security number.
Whenever you have a major change in your family, it makes sense to see if your insurance matches your lifestyle.