College Renters Insurance 101By Patrick Jones, UniversityHerald Reporter
Insurance usually isn't top of mind when you're young and going off to college. You may have thought about car insurance. And you may have heard of tuition insurance, due to the coronavirus crisis. But you probably haven't thought about buying renters insurance.
Since this topic will likely be brand new to you, we'll get you prepared with the right coverage whether you're living on or off campus.
Why You Need Renters Insurance
While you're usually not carting all of your worldly goods off to school with you, just think of all the things you do bring - laptop, TV, supplies for your major, jewelry, appliances - and that's just for a dorm! If you're off-campus, that list could also include furnishings.
These belongings can easily reach thousands of dollars. And college students don't usually have emergency funds to quickly cover those losses.
Additionally, with meeting new people and parties, there are a lot of people coming in and out of both on- and off-campus housing at all hours, and some of them take advantage of the usually relaxed campus security.
According to the most recent dorm security data, 62,787 burglaries occurred in college dorm rooms from 2012-2014. Dorm burglaries are the top dorm security threat, accounting for 70 percent of the total crimes, while 15.4 percent were vehicle thefts and 7.6 percent were dorm robberies.
What's stolen most? Electronics, money (cash, credit cards, debit cards), bicycles, textbooks, and jewelry/clothing. But there's not only theft to consider.
Nearly 2,000 fires were reported in campus-based student housing, according to the Clery Act Reports from 2009-2019. And 98 percent of colleges and universities don't replace stolen or damaged student property, according to HigherEdStudy.
What Renters Insurance Covers
Typically, renters insurance covers four main areas.
Renters insurance will cover your lost or damaged items up to the policy amount if you're burglarized or robbed. Once your deductible is met, your insurance company will pay for the damage based on the replacement value of the items.
The deductible is the out-of-pocket amount you pay to cover any loss before your insurance company pays the rest. One of the ways to save on your insurance rate is set your deductible higher than the minimum, but that's only recommended if you have the funds to pay that higher deductible amount in the event of a loss.
Renters insurance will cover fire and smoke damage to your household goods. Like with theft coverage, the insurance company will cover up to the policy amount once the deductible is met.
Renters insurance will protect you if you're sued. For example, if you caused a fire where you're renting, your landlord may be able to sue for damages. Your insurance company would cover up to the policy limit in legal fees and damages.
Renters insurance will also protect you if someone got injured while on the property. Your insurance company would cover the legal costs and any awarded damages up to the policy limit.
Loss of Use
Renters insurance will cover your living expenses up to the policy limit in the event you must vacate your living premises. Your insurance company would cover hotel rentals, dining out, and transportation if all of these additional costs are due to being forced out of your living space.
Renters Insurance for On-Campus Housing
Your checklist for moving into your dorm should include bedding, shower supplies, your coffee machine...and insurance?
Check Your Parents Homeowners Insurance
Find out what your parents' homeowners insurance policy covers.
If you'll be living in a dorm, their insurance may extend to a limited amount of your personal property. And their insurance won't usually cover liability or loss of use. According to the National Association of Insurance Commissioners, students under the age of 26 and living on campus may be covered through their parents' policy.
When you're checking if your parents coverage extends to you, check on the policy's coverage limits for you, which are often referred to as off-premises coverage. This coverage usually comes with limits. For example, if your parents' policy has $100,000 worth of coverage for belongings, the limit for off-premises belongings might be 10 percent of that or $10,000.
If the off-premises coverage isn't enough to cover the items you'll be taking to school, your parents may be able to add what's termed scheduled personal property coverage to their policy to help cover for that.
And note - while you share a tiny space with your dorm mate and you may be best friends forever, you can't add them to your parents' insurance policy.
On-Campus Renters Insurance Possibilities
Find out what your school offers. Many colleges and universities have established relationships with insurance companies that provide discounts to students.
Another option is to talk to insurance companies about dorm insurance, which is also sometimes called college renters insurance. This type of policy covers your personal property and usually has a lower deductible, under $100. And while it covers your personal property, unlike full renters insurance, it usually doesn't cover liability or loss-of-use.
Regarding liability, you're usually excluded from this if you live on campus. And loss of use won't apply if you live in dorms owned by your college or university. If your dorm becomes uninhabitable, it's probably the school's responsibility to provide you with alternate accommodations.
Even if your parents' coverage extends to your dorm life, you may still want to opt for your own dorm insurance for two reasons:
- If you tend to lose or break items frequently, a dorm policy's deductible tends to be on the lower end
- If you own your own policy, you can make claims directly and not have to bother or wait for your parents to deal with their insurance company
Renters Insurance for Off-Campus Housing
Insurance is one of the essential expenses to track when you're creating a student budget.
Get Your Own Renters Insurance
If you're living off campus, your parents' homeowners insurance will most likely not extend to you. You will need to get your own renters insurance.
Off-Campus Renters Insurance Possibilities
Renters insurance for off-campus could be considered a mini college course in itself. It's perfect prep for renters insurance after you graduate since it's identical to typical renters insurance. Your renters insurance should provide you with all of the protections for personal property, liability, and alternative accommodations.
And you'll be able to adjust the amount of coverage you need to reflect the amount of the belongings you own. Renters insurance policies usually cover up to $20,000 to $30,000.
And if you want to add a roommate to your off-campus renters insurance policy, you can, but since this is seen as extra coverage the insurance company will raise the price of your premium. So it's recommended that each roommate get their own insurance policy.
Average Cost of Renters Insurance for College
Since there are three main factors that will affect the cost of your renters insurance, prices can vary. But know that you'll be paying less than homeowners insurance because a renters policy doesn't cover the actual structure itself, only the goods inside of it.
Renters insurance for college students is more affordable than you may think. The average cost for on-campus renters insurance will run you $160-$170 for a year of coverage which is only $13-$14 a month. The average cost for off-campus renters insurance is usually a little higher, about $20, so only $15-$16 a month.
So one less pizza a month, and your belongings are covered!
The factors that will affect your price include the following.
Consider this factor carefully when you're selecting coverage. The coverage limit includes the amount of personal property, and for off-campus housing, the total liability amount as well as the amount desired for loss-of-use reimbursement.
This is a factor out of your control. Insurance companies establish the pricing of this factor based on areas that have higher crime rates and disasters. So if you're in the inner city where the crime rate is higher, your premium will typically be higher than if you're living in a lower crime neighborhood.
Structure and Security
While renters insurance doesn't cover the structure, the type of building you're in, the building materials, and the protection equipment installed in it also determines the price of your policy. For example, a home with an alarm system or deadbolts is harder to burglarize, so your rate will tend to be lower.
Buildings with built-in fire alarm systems that contact the fire department automatically can also reduce your rate.
Choosing Renters Insurance for College
The good news is that you have options in choosing renters insurance. It's recommended to get quotes from at least three companies, and one of the first and easiest ones to get could be the insurance company your parents use since there's already an established relationship.
But whatever type of coverage you do get, make sure to do what's called a home inventory, a list of your possessions backed up with relevant information like item type, purchase date, and price. Serial numbers, receipts, and photographs are also helpful. Your inventory can also include a video.
Be sure to keep your checklist and digital record in a safe place.
Your inventory will be invaluable if you need to file a claim, as the insurance company will ask for proof of loss of what was damaged, and how much it was worth. Your claim could be denied if you can't provide evidence
Now that you know that what you bring with you to school can be taken care of, it's time to take care of getting ready for college during COVID-19. Stay safe, and be smart!
Karen Condor is an insurance expert who writes and researches for the insurance comparison site, ExpertInsuranceReviews.com.