If you have a kid that has gone off to college, you're probably like most parents and have spent thousands of dollars on a new laptop and other purchases.
And thanks to inflation, technology purchases are expected to jump 22% this year from 2021, according to the 2022 Deloitte "Back to College Survey." The cost of everything — scooters, bikes, TVs, furniture, bedding — is all going up, which means it also costs more to replace anything that's stolen or damaged.
With all that new stuff in your child's dorm room or apartment rental, you'll want to make sure it's protected against theft and damage from severe weather, fire or if one of their friends sits on the laptop or knocks it off a table.
Your homeowner's insurance may sometimes cover their property if they are living in an on-campus residence. That coverage is limited to 10% of your policy's coverage, which would likely be enough if they have to file a claim. But if they file a few claims, it could adversely affect your homeowner's premium later.
Also, some homeowner's policies don't include a student's residence, so it's best to confirm coverage.
The best way to ensure that new property is protected is by securing a renter's insurance policy.
What it covers
This affordable coverage can protect all of your college student's belongings, which will be replaced if any of them are damaged or stolen.
Theft is covered even if it's stolen away from the home, like if someone breaks into their car or steals their backpack.
Coverage specifics will vary among insurers. It's important to ensure that a policy's maximum benefit would cover all of your child's things.
For best results, choose a policy that pays the replacement cost for damaged or stolen property instead of the cash value (which is depreciated over time). Look for any exclusions in coverage as well. If you need assistance deciphering your policy, please give us a call.
A renter's policy will cover one of the most common events, water damage from a building sprinkler system that is set off (either accidentally or if tripped to extinguish a fire) or from rain entering through a hole in the roof.
The coverage also includes a liability component that would cover the costs of a guest being injured while visiting your child. The liability portion may cover the cost of litigation and/or any awards or settlements.
Costs
Renter's insurance is reasonable, with premiums typically ranging from $15 to $30 a month for off-campus housing (apartments and houses), depending on where you live.
The deductible — typically either $250 or $500 per claim — will also affect the cost of coverage. The lower the deductible, the higher the premium.
To illustrate: A policy with a $500 deductible may cost $250 a year in premium. The total cost if your child files a $1,500 claim for a stolen laptop would be: $250 + $500 = $750.
A policy with a $250 deductible may cost $290 a year in premium. The total cost if they file a $1,500 claim for a stolen laptop would be: $250 + $250 = $500.
One thing to note: If your child has high-value possessions like musical equipment or high-end computer gear, you may need a renter's policy endorsement that has higher limits for those items.
If they also have a vehicle, you can bundle their auto insurance with their renter's insurance for further premium discounts.
Give us a call if you'd like to discuss the coverage options in more detail.