Is a Homeowners Insurance Policy Enough Coverage for College?
Or Should I Consider Renters Insurance?
College students and their families were projected to spend an average $836.83 on back-to-college shopping in 2013 (source). When statistics show that many college students have been victims of theft and property damage, that’s a lot of money at stake:
- Over the 2007-2009, roughly 28,000 burglaries were reported on campuses each year, with an average in excess of 14,000 per year having occurred in the residence halls (source).
- During the five-year period of 2005-2009, an estimated average of 3,840 structure fires were reported in dormitories, fraternities, sororities and barracks per year (source).
With the risks of college living in mind, how can students help protect their personal belongings?
One option is a homeowners insurance policy. Students with parents who own a home and have homeowners insurance may be covered under this plan up to a certain amount. Coverage for students under homeowners insurance depends on the specific policy and the student’s situation—the student’s age, enrollment status, and where the student lives can all affect coverage under a homeowners plan.
Students living in the residence halls at school are most likely covered under a parent’s homeowners policy. Students living in off-campus apartments, however, will not likely be covered and may want to consider getting renters insurance in order to help protect their belongings and liability. It is important for families to check with their agent or review their policy to determine whether a student has coverage.
Some homeowner’s policies require that you are enrolled in school full-time, others don’t specify, and others still impose an age limit on coverage in on-campus housing. Whether homeowners or renters insurance makes more sense for your family, make sure to take an inventory of how much the things you bring with you to school are worth and check to see if that value falls within the covered limits of your plan.
Should you purchase renters insurance or use an existing homeowners insurance policy? When weighing a homeowner’s policy against a separate renters insurance policy for your student, you should consider the following:
- Deductible – Homeowners policies tend to have high deductibles. It’s a good idea to check to make sure it would be worth it to make a claim if your laptop was stolen from the library, or your things were damaged in a residence hall kitchen fire. If the policy has a high deductible (typically around $1,000), you may want to consider renters insurance, which typically features a low deductible (as low as $100).
- Premium – Filing a claim against a parent’s homeowners policy can affect the policy’s premium moving forward. Are your parents okay with a higher premium because of a stole laptop? Make sure to check with your parents and your agent.
- Are you covered on campus? Make sure to read the fine print of the policy to ensure you are eligible in the residence halls. Some plans may specify a certain number of credit hours to qualify.
- Are you covered off campus? Most homeowners policies won’t cover a dependent living in an apartment. Check with your agent to confirm any coverage limitations.
- Limits - Since you’ll be living away from home, the amount of coverage you’ll need likely won’t be the same as the policy’s limits – many plans cover up to 10% of the limits for property away from the home. Do the math and take an inventory to make sure your personal property is fully covered.
Some things to consider about renters insurance:
- Low deductible – Typically, renters insurance policies feature low deductibles, so you won’t be out too much cash to replace your losses. Compare plans and talk with an agent to find a plan that has a deductible that works for you.
- Low rates – A yearly renters policy typically costs less than a homeowners policy, and you can likely find a plan offered at a low monthly rate.
- Worldwide property coverage – Some renters insurance plans will cover your belongings worldwide – if you are traveling, or in the library, your property will still be protected.
- Liability – Liability coverage is an option you can add to many renters insurance policies to help protect yourself further.
- Customizable – Instead of being subject to the insurance needs of your parents home, you can choose the limits and features you need from a separate renters insurance policy.
Regardless of the policy you are covered under, it is important to protect yourself and your belongings while at school. Learn more about protecting yourself from theft, fire and dorm damage fees.
So, will a homeowner’s policy protect you while you’re at school? Make sure to do your due diligence and examine you parents’ policy to make sure you are covered, and if need be consider a renters insurance policy.