a good college experience
It's that time again,
kids are headed back to campus. Squeezed into the trunk along with books and clothes
are all of the must-have items of today's college set: a laptop computer, cell
phone, MP3 player, television and a top-of-the-line mountain bike.
That's a lot of
expensive stuff. That's why it's not a bad idea to also pack an insurance policy.
take a significant amount of personal property with them at college, and the likelihood
of theft or fire loss is increased while they are away at college," says
David Thompson, a staff instructor with the Florida
Association of Insurance Agents in Tallahassee, Fla.
generally have two choices when insuring the possessions of their college-bound
kids. They can get a child covered under their existing homeowners policy, or
they can buy renters insurance. Both approaches have advantages and disadvantages.
to an existing policy
The cheaper option is putting your child on your
policy. Parents can do this provided the child's primary residence remains
the family home and it usually costs nothing.
Coverage is generally 10 percent of your homeowner's
insurance policy, says Jacki Jungsberger, a vice president with
Tri-County Agency Inc. of Brick, N.J. For example, if your family
has a $200,000 policy for its home, then your college-bound youngster
would be covered up to $20,000.
Depending on your existing policy and
what sort of property coverage your child may need, you may need to add a rider,
which would add to the cost.
The disadvantage of using your
insurance to insure your child: Any claims made by your child will be made toward
your policy. Repeated claims can raise your rates and can even make it difficult
to keep or get another insurance policy.
is the likelihood of a claim is greater for a child away at college, and if a
claim is submitted it goes on the parents' policy and stays on their record for
several years," FAIA's Thompson says.
In addition, having
your child ride on the coattails of your homeowners policy may not be enough coverage
because of caps and high deductibles.
John P. Carr, president
Insurance Agency, a Roswell, Ga.-based insurer that specializes in college
insurance, has done the math.
"Most homeowners' policies
have a $500 or $1,000 deductible," Carr says. "If I have a $1,000 deductible
and lose a laptop valued at $3,000, with my $1,000 deductible I'll only get $2,000.
There's no way I can replace the laptop for that kind of money."
a renter's policy makes sense
If adequate coverage or putting your
child on your own homeowner's policy is a concern, the other option is to get
renter's insurance for your college-bound child.
here is that any claims won't affect your homeowners insurance. In addition, the
policy can be tailored specifically for your child's situation. A customized insurance
policy can ensure that your child's possessions are adequately covered.
many college students find that renters insurance is the only way to get property
properly insured. According to Carr, approximately 22 percent of college students
aren't covered by their parents' property insurance either because they are foreigners
or they don't permanently reside with their parents.
disadvantage of renter's insurance is the higher cost. That said, a renter's policy
doesn't have to be overly expensive. CSI Insurance, for example, offers college
student policies ranging from $2,000 up to $25,000 in coverage. Carr says the
average student buys a $5,000 policy with a deductible of $25 and an annual premium
What to consider
How do parents decide the right course? Start with what you've got. Ask your own
insurance broker exactly what your property insurance covers and whether your
child can be added to the policy (and at what cost).
determine that renter's insurance is a better choice, again start with recommendations
from your insurance agent. You also can compare the offerings from companies that
specialize in student policies, such as CSI or National Student Services of Stillwater,
And check with your child's school. Many universities
and colleges strike deals with insurance companies or, at the very least, know
what companies offer insurance to college students.
the same steps you'd take when buying any form of insurance, Carr says, including:
- Get quotes from as many vendors as you can.
whether the policy covers replacement or the actual value of an item. You'll want
a policy that pays replacement costs, that is the cost of getting a new item to
replace the lost or stolen one.
- Find out what's
included or excluded from the policy. For example, if the policy excludes fire
or flooding, you may want to look for a more inclusive insurance policy.
- Look for a policy that covers losses not just in living
quarters, but for school-sponsored trips.
want to make sure that coverage for liability claims is included, says FAIA's
Thompson, regardless of whether your child is covered on your homeowners policy
or a separate policy.
"Homeowners' policies provide liability
coverage automatically, but again coverage depends on the specific situation for
the child," Thompson notes.
For that reason, Thompson
says the best advice he or any insurance professional can give is that a parent
with a college-bound child "contact their agent, carefully explain the situation,
and allow the agent to explain the coverage under the policy. With so many different
companies writing policies and so many different situations with kids at college,
giving a generalized answer can be dangerous."
could be more dangerous -- and expensive -- to ignore insuring your child's property
while he or she is away at college.
C. McCune is a contributing editor based in Montana.