My niece and fabulous intern, Lizzie, graduated from a Dallas area high school in June and will be heading for Fayetteville to attend the University of Arkansas in three weeks. I felt this would be a good time to re-visit property insurance for college students.
Every August, one of the questions I’m asked by parents of college bound students is how to best insure their kid’s personal property. There are actually two ways to do so, and it depends entirely on whether the student lives in a dormitory or off campus in either a fraternity / sorority house versus apartment or rental home.
Dorm Room: If your son or daughter will live on-campus in either a dormitory or in a sorority or fraternity house, use your home insurance policy. Most home insurance policies will cover up to 10% of the personal property or contents amount off-premises. Off-premises can be contents in your car, a storage facility, a dorm room or room in a Greek house.
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 $15,000, which should be more than enough coverage for the typical dorm room.
The only caveat is anything lost or stolen of your student’s personal property will be subject to the home insurance policy’s deductible. For Texas home insurance policies, the deductible will range from $1,000 to 1% of the home’s dwelling value. In the above example, the home policy deductible will be $2,000 if there’s a 1% deductible.
Items such as smart phones, laptops, tablets, or musical instruments should be scheduled. Scheduling an item on a home policy simply means listing them for their stated value under the scheduled items portion of the policy. Most home insurance policies will schedule electronics, smart phones and musical instruments so if they are damaged, lost or stolen you’re only facing a $0 to $100 deductible instead of a $2,000 deductible or more. The cost to schedule such items is typically nominal for electronics and musical instruments. Be sure to include printers, accessories, and software costs with scheduled laptops and tablets.
Apartments & Rental Homes: Many students move into an apartment or rent a home after the first or second year at school. When that happens, I recommend a renter’s policy because the student will have more stuff than they would in a dorm room. In addition to the electronics and decorative accessories, there’s furniture and possibly appliances such as a washer and dryer.
Renter’s policy rates are determined by the amount of the contents coverage, what type of home the student is living in (apartment or home, brick or wood exterior, etc.), where the home is located (large city such as Dallas, Fort Worth, Houston, Austin or a smaller town such as College Station, Lubbock, Abilene, etc.) and protective devices such as fire and burglar alarms. Mix all these factors together and the cost of a renter’s policy will range from $150 to $300. Common deductibles are stated in dollar amounts such as $250, $500, and $1,000 depending on the insurance company
If your son or daughter is going to school out of state then you’ll need to get a renter’s policy that’s specific to that state and from an agent licensed in that state. For instance, if you have a child attending the University of Arkansas, they’ll need an Arkansas renter’s policy written by an agent licensed to write insurance in Arkansas. If you elect to simply have your home insurance cover your student’s property, there’s no need to have a state specific alteration to your home policy. Your student’s property will be covered in any state in the US. If they are attending school out of the country, then seek coverage that’s written in that country.
What did you do for your college student? Share your experiences, comments, advice, and questions with us on my Google +, Facebook, or LinkedIn pages. I’d love to hear from you!