Does your college student need renters insurance?
Most parents think about the physical safety of (and how much they'll miss) their kids when they go off to college... but what about protecting their belongings? We looked into renters insurance to find out: Is it something your college student really needs?
While dorm fires are only 1/3 the national average, they still cause $4.1 million in property damage each year, according to the Federal Emergency Management Agency (FEMA). While this number includes damage to the building and property your student doesn't own, we decided to examine whether your student (and you if you're footing the bill for their living expenses) could benefit from renters insurance.
The biggest issue is theft! A recent study by Travelers found that 50 percent of educational institutions report theft as the most common crime on campuses.
A common misconception is that your personal possessions are covered under your landlord's (or the college's) insurance. Not true. Another potential misconception is that college students don't have anything to protect. But what do kids usually have with them when they're away at school and what does it cost to replace their belongings?
- Television: $435
- Laptop: $800
- Computer software: (about) $150
- Smartphone: $372
- Wardrobe (female): $1,500
- Textbooks and supplies (per year): $1,200
- Total: $4,457
That total assumes your student lives on campus in a furnished dorm that offers amenities like a kitchen (microwave, stove, fridge, etc.). If your student lives off campus, they'll need to provide many of these things (and more) themselves. It also doesn't include other personal items, like jewelry or valuables. You'll also notice it doesn't include computer extras like a printer, speakers and other peripherals. Nor does it account for students who have more expensive taste or needs (in the case of students studying graphic design).
When we consider that renters insurance costs only $150 to $200 a year, we think considering renters insurance is a good idea for all. But how do you know what you need?
Tips for buying renters insurance
Renters insurance can cover a lot of things, depending on your needs.
- Damages to furniture, clothing and other personal items
- Personal belongings (even if they're not in your dorm or apartment)
- Personal liability for another person's injuries or their property (if damaged)
- Additional living expenses if your student is displaced as a result of fire or other covered hazards
We talked to Elaine Baisden, vice president of Travelers Personal Insurance, and she gave us these tips on insuring your college student's belongings. Baisden also recommends talking to your insurance professional to ensure the policy you have will adequately cover your student's needs.
While some homeowner policies include coverage for personal property away from home, it may not adequately cover your kid's needs. Consider whether to buy coverage for actual cash value (the value of the possessions at the time of loss, which includes depreciation) or full replacement value. Replacement coverage is more expensive. But if your student's possessions are older, or you're unlikely to have the money to cover even a few hundred dollars, replacement is the smarter option.
Do an inventory of your child's belongings. A video camera can be helpful, but there are plenty of templates online to help you make sure you cover everything.
There are policy add-ons that you can use to expand your protection if your student has specific valuables that wouldn't be covered under a standard policy.
Note that flood damage isn't covered under renters insurance, so you'll need to buy that under the National Flood Insurance Program.