As if tuition weren’t expensive enough, many parents of college-bound students also find themselves spending thousands of dollars on computers, gadgets, furniture, bikes and books for their college freshman.
While reports of on-campus property crimes have declined significantly since 2001, the crime rates vary dramatically from campus to campus. And while most college campuses are relatively safe, they’re also target-rich environments for property theft.
Considering the substantial investment in the resources and tools your student needs, it’s a good idea to make sure these items are covered by insurance, either through your existing policy or perhaps a dorm plan.
What is dorm insurance?
Dorm insurance is student property insurance, which covers a college student’s personal property from theft and accidental damage. Depending on the policy, it may cover students living in dorms or off campus, and may even cover your student’s property while studying abroad. (Because of this, dorm insurance is a bit of a misnomer.)
Dorm insurance is strictly coverage for property theft (and sometimes damage); there is no liability coverage included.
Since most homeowners or renters insurance policies will cover a dependent child’s property while living in a dorm, a separate dorm insurance policy often isn’t necessary.
“It doesn’t make sense unless parents have no homeowners or renters insurance,” says Robert Hunter, director of insurance at the Consumer Federation of America. Even then, it makes more sense for the parents to purchase such insurance and get everyone covered than to buy separate dorm insurance, Hunter adds.
When does it make sense?
A dorm/student property insurance plan may make sense for your family if:
- Your student isn’t covered by your homeowners/renters insurance policy.
- You have a very high deductible on your existing policy.
- You don’t want your student’s claim to impact your homeowners premium.
If the deductible on your homeowners insurance is higher than the value of all your child’s belongings, you may want to consider adjusting your deductible or purchasing a separate student policy.
“Higher deductibles are going to drive down the premium costs,” says Michael Barry, vice president of media relations at the Insurance Information Institute (III). That’s why many homeowners insurance policies have high deductibles.
According to Consumer Reports, the typical deductible for an average homeowners policy is $500 to $1,500. A $1,500 deductible might be feasible if you’re covering the entire contents of your home, but that’s an awfully high deductible to pay for a stolen laptop.
Student property insurance policies usually have lower deductibles and premiums, since they’re only covering a limited amount of student belongings. Some even cover accidental loss or damage. For example, you can get a student property insurance plan covering up to $6,000 worth of stolen property with a $100 deductible for less than $150 annually.
Is your homeowners coverage enough?
If you have homeowners or renters insurance on your family home, your child’s belongings may already be covered.
“A standard homeowner’s policy will generally cover your child’s belongings if your child is a college student and living on campus,” Barry says. “A child living in a dorm can generally rely on their parents’ homeowners insurance policy for coverage, in the event of a theft of their personal belongings while on campus.”
Check your policy to make sure your child’s belongings are covered at college, the deductible is reasonable for her belongings and there are no other restrictions that might disqualify you.
For example, many insurers limit coverage of campus property to 10 percent of your contents limit, according to the III. So, if you’re covered for $50,000 in losses, your child may only be covered for $5,000. Be sure to review your insurance policy for more details.
If your child lives in an off-campus apartment, your homeowners insurance may not cover them, according to the National Association of Insurance Commissioners.
“I would counsel parents to have their son or daughter purchase a separate renters insurance policy if they are renting an apartment off campus,” says Barry.
More tips for protecting belongings in college
Once you’ve figured out how to insure your student’s belongings, consider taking these extra steps to minimize risk and prepare yourselves in the event of a theft:
- Prepare a list of all valuables your child is bringing to college, and be sure you have proof of ownership. This will help when filing claims.
- Consider investing in a safe or safety lock for laptops and other electronics.
- If you have an expensive laptop, you can subscribe to a tracking service to increase your chances of recovering it if it’s stolen. This also allows you to disable your computer as soon as it’s missing to protect your data from thieves.
- Talk with your student about the importance of locking doors and storing valuables out of sight. No need to make a thief’s job any easier!
Mary Purcell is a freelance consumer finance and health writer based in the San Francisco Bay Area. Her articles have appeared on Narrative, SafeBee and other outlets. She covers insurance for MoneyGeek.com.