Homeowners Insurance or Renters Insurance

How often do you review your homeowners’ insurance policy? Every year, approximately 13 million young adults make their foray into their first true act of independent adulthood: moving away from home to attend college. Generally by the time they have reached this age, they have amassed several thousand dollars’ worth of computers, video games and other electronics, as well as bicycles, books and clothesmost of which were dutifully financed by doting parents. When the child goes to college, the parents then need to determine whether their homeowners’ insurance will cover these possessions, or whether renters’ insurance is needed.

Naturally, additional insurance is yet another expense piled on top of the many other expenses involved in sending a child to college. However, the cost of the premium on either homeowners’ insurance or renters’ insurance is far less than the cost of replacing expensive computers and text books.

Consult your Agent

The most important step you can take in determining what coverage you need is to talk to your homeowners’ insurance or renters’ insurance agent. Every company and policy is different, so your agent can tell you exactly what your policy does and does not cover. Your policy may have limits or deductibles you need to consider.

It is very common for homeowners’ insurance policies to cover your child’s possessions only if they are staying in campus housing. Dorms, while they can get a little wild, are a somewhat controlled environment in the eyes of insurance companies. Living off campus, on the other hand, is completely uncontrolled and considered to be a greater risk. Therefore, if your child will be renting a place off campus, they will need to get renters’ insurance to cover any potential losses. Even if their roommate(s) has renters’ insurance, policies usually do not cover roommates who are not related, so each renter needs their own policy.

Before they Go

Before your child heads out the door to college, take an inventory of their possessions. Particularly with expensive items like computers, taking pictures and keeping receipts will facilitate the process in the unfortunate event that you have to make a claim against your homeowners’ insurance or renters’ insurance. The perfect time to do this is when your child is packing.

You should also have a talk with your child about the responsibility of having a homeowners’ insurance or renters’ insurance policy. This is not a catch-all failsafe for careless behavior! Most policies have limits on coverage, and making too many claims can have negative effects on renewals or future policies. Insurance policies are not meant to get your child free stuff, but to restore their expensive possessions in the event of an emergency. Responsible use of an insurance policy is just as important a life skill as judicious credit card usage, budgeting and proper health care and nutrition.

Sending your child to college is an emotional and stressful time, so be sure to talk to your insurance agent well in advance to make sure you understand exactly what your policy covers. Whether you are able to keep your child on your homeowners’ insurance or get them a renters’ insurance policy, the expense and trouble is well worth it and will give you some small peace of mind while your child is out of your reach.