College students may need their own renters insurance policies

Key Points
  • Theft is the most common claim, at 41 percent of cases.
  • Students may not be covered under a parent's homeowners policy if they live off campus.
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A case for renters insurance

The tuition is paid, the books are purchased and the dorm room mini-fridge is stocked. But there's still one back-to-college expense families should assess — renters insurance.

Theft and property damage incidents on college campuses are relatively rare, but not unheard of. In 2015, colleges reported 1,926 fires at on-campus student housing, according to the Department of Education. Burglary is the most common on-campus crime, per a 2016 National Center for Education Statistics report, accounting for half of crime at public and private 2- and 4-year institutions. The 13,500 burglaries reported equal roughly nine incidents per 10,000 full-time students.

Renters claims frequency GRANT

Loss Percentage of claims
Theft41%
Water (not related to weather)12%
Electrical failure12%
Mysterious disappearance6%

Your student might not need a separate policy. Usually, dependent students' possessions are covered under their parents' homeowners or renters insurance policy, said Angie Orbann, vice president of property and personal insurance for Travelers.

Renters claims payments GRANT

Loss Percentage of claim payments
Theft37%
Fire27%
Water (not related to weather)12%
Mysterious disappearance5%

Yet it's worth checking with your agent. Depending on the details of that policy, there can be gaps that leave you or your student at risk:

Housing. A parent's policy often extends coverage for students living in on-campus dorms, but may exclude a student living in an off-campus home or apartment, said Loretta Worters, a vice president for the Insurance Information Institute. They'll need their own policy to protect their possessions and provide liability coverage.

Possessions. Most policies cap coverage for "items stored off-premises," which would include your child's dorm-room contents, at 10 percent of the policy, said Orbann. Valuable items like electronics, collectibles and jewelry have even lower limits — and of course, those are the items more likely to be misplaced (what insurers dub "mysterious disappearance") or stolen.

"The stuff students bring to college can add up pretty quickly, " she said.

Common renters losses GRANT

1CashHobbies and collectiblesJewelry and watches
2Jewelry and watchesClothing and accessoriesClothing and accessories
3"Music movies and media"Sporting goodsHousewares
4Clothing and accessoriesCashCameras and equipment
5Hobbies and collectiblesJewelry and watchesCash

Renters insurance basics

A renters insurance policy can be cheap peace of mind, said Tim Manni, a mortgage expert with NerdWallet.com. Policies typically protect the policyholder's personal possessions and provide liability coverage, as well as compensation if a covered disaster (like a fire) forces you to find alternate housing.

The average annual cost of a renters policy is just $190, according to the latest data from the Insurance Information Institute. (For comparison, the average homeowners insurance premium is nearly six times that, at $1,132.)

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Consumers often think they don't need their own insurance, because their landlord has it or a roommate does, Manni said. But that's a misconception. A landlord's policy doesn't cover tenants' possessions, and neither will a roommate's policy, he said.

As with other kinds of insurance, it's smart to shop around for a renters policy, comparing prices and terms, he said. Create an inventory of possessions to make sure your student has enough coverage.

Ask to see if there are any discounts — like those for attending a particular college or having another type of insurance (like auto) with the same company. Insurers may also offer a break for security precautions in the building or apartment.

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