Does your college student need property or liability insurance? I’m asked this question by clients who have a son or daughter headed off to college each August, and it is that time again. The answer is it depends more on where they’ll live; whether it’s in a dorm room on campus or off campus in an apartment, condo, or home. Let’s review both scenarios.
Dorm Room: If your son or daughter will live on-campus in a dormitory they don’t need renter’s insurance. Most home insurance policies provide coverage for personal property off premises, or items stored in a dorm room, storage unit, etc. The amount your home insurance policy covers depends on the carrier, but it’s usually 10% to 20% of your personal property or contents.
For example, a home insured for $200,000 will have contents coverage ranging from 60% to 75% of the home’s value or $120,000 to $150,000. The amount of off-premises contents coverage will range from $12,000 to $30,000, which should be more than enough coverage for the typical dorm room.
The only caveat is anything lost or stolen is subject to the home insurance policy deductible. Texas home insurance policies normally have a deductible ranging from $1,000 to 1% of the home’s dwelling value which means the home policy deductible will be $2,000 if there’s a 1% deductible for a home with an insured value of $200,000.
Items such as smart phones, laptops, tablets, and musical instruments can be scheduled on most home policies. Scheduling an item on a home policy simply means listing that item or items for their stated value under the scheduled items portion of the policy. This is optional coverage on the home policy and will have a nominal cost to add it. It also usually means there’s either no or a small deductible such as $100.
Apartments & Rent Homes: Many students move into an apartment or rent a home after the first or second year at school. I recommend a renter’s policy when that happens because the student usually has more personal property than their dorm room accommodates. You’ll need enough coverage to cover more electronics, decorative accessories, furniture and any appliances you own such as a washer and dryer.
Renter’s insurance policy rates are determined by the amount of the contents coverage, what type of home the student is living in, where the home is located and protective devices such as fire and burglar alarms. The cost of a renter’s policy will range from $150 to $300 a year. Common deductibles are stated in dollar amounts such as $250, $500, and $1,000 depending on the carrier.
If they have roommates living with them, each roommate will also need their own renter’s policy, as renter’s insurance only covers the items owned by each separate renter. A renter’s policy will also provide personal liability coverage for your student which is needed should someone get hurt when visiting the apartment or home.
Students attending an out of state school will need to get a renter’s policy specific to that state and from an agent licensed in that state. For those students attending school abroad, they’ll need coverage which is written in that country. Where will your student attend college? Share that with me along with your experiences, comments, advice, and questions on my Facebook, Google +, or LinkedIn pages. I’d love to hear from you!