With the high cost of a college education today you might see renter’s insurance for a student apartment as a luxury you can’t afford. But, think back to move-in day with your student. How long did it take to unload your car, truck or moving trailer? Could you afford the financial burden of replacing those items if stolen or damaged by fire? Renter’s insurance is generally a good value and a wise investment for several reasons.
“Doesn’t my own homeowner’s insurance policy cover my child at school?” The answer is, “Maybe.” It is true that most homeowner’s policies do provide some coverage for students away at college; however, the coverage is limited, typically to 10% of the personal property limit on the homeowner’s policy. For a total loss, like an apartment fire, the 10% limit will probably not be enough. You’ll need to do some comparison shopping, but in most cases, separate renter’s insurance will be less expensive than increasing the coverage limits on your own homeowner’s policy. Think an apartment fire is unlikely? Think again. Unfortunately student rental properties are often poorly maintained. And when you add the high risk behavior of some college students, i.e. smoking, burning candles and uncertain cooking skills, the risk of an apartment fire can be significant. Because of those risks renter’s insurance makes sense.
Check with your agent to determine if there are limits on specific types of property like computer equipment. If your student spends a semester studying abroad make sure that coverage from the policy can be extended outside U.S. borders.
Also be aware that many insurance companies base premiums on the number of claims submitted. If Susie files a claim under Mom and Dad’s policy, the increased premium that results from that claim could stay with Mom and Dad for years to come. With separate renter’s insurance, Susie’s claims stay with Susie and Mom and Dad won’t lose their claim free discount.
Separate liability coverage for your student under his own renter’s insurance is another benefit. Accidents happen and unfortunately lawsuits sometimes follow. For the college party that gets out of hand and results in property damage or injury separate liability coverage under your student’s renter’s insurance could protect your own assets from being pulled in to pay those damages.
Prices for renter’s insurance will vary, but by comparison shopping and taking advantage of company discounts, renter’s insurance may turn out to be less expense than you might think. If your student also has a car, be sure to ask about Home/Auto discounts for insuring both with the same company, discounts based upon your student’s good grades, discounts based on non-smoking status and for apartment complex security features like burglar alarms and sprinkler systems.
Finally, when your student is ready to “graduate” to a real home of her own, having established renter’s insurance in her own name may allow her to qualify for a “customer loyalty” discount if her homeowner’s policy is obtained through the same company that provided the renter’s insurance on the student apartment.
With so many benefits for relatively low cost, renter’s insurance on an off campus student apartment isn’t a luxury. It represents just one more tool for helping to protect your most important investment; your child’s future.