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As September approaches, college students are collecting textbooks, polishing up their class schedules, and shopping for that perfect dorm room setup. Insurance is probably not the first thing on their minds. Unless - you are a Risk Management undergrad at Temple University. ALS Intern, Jason Glickstein, outlines why insurance should be on every college students’ back to school checklist.
The way I see it, there are a few major scenarios in which students returning to their dorms or off -campus apartments could wind up in “hot water”:
- My “stuff” get stolen or damaged;
- Someone steals my computer, which houses personal info and I have no backup;
- There is an “incident” that involves liquor (in college? No way!), fights, or general arguments, in which someone gets hurt.
While I know these things seem far-fetched, I thought it would be a good idea to touch on how students and their parents might be protected by insurance (or not).
Most parents will have a homeowner's or renter's insurance policy, what the insurance industry calls an HO-3 or HO-4 (a condo is an HO-6), which will provide some coverage for the “resident premises”. But what about the dorm room or off-campus apartment?
Well, let’s take that one “event” at a time…
Generally, for “stuff” that gets stolen or damaged, a percentage of the personal property insured (contents) applies off site – usually 10%. That will, generally, cover theft or fire and the resulting damage to the student’s property. If the student caused the fire (love those candles) the damage to the dorm may be covered under the liability.
An incident that takes place in a dorm room, like an injury from a fight, should be covered under the parents’ policy. If this same fight were to occur in your off-campus apartment, you might only be protected if you have renter’s insurance, which shields you from personal liability including medical costs incurred by a guest.
So… Am I covered?
The answer to “Am I covered?” can be a bit tricky depending on what kind of coverage you have. Some of the aspects that need to be considered include the age of the student, the relationship to the insured party, whether they are a full-time or part-time student, and their distance from home. This raises additional questions like: What if a student is full-time but drops a class and switches to part-time? What if the student is travelling abroad? What if they “age out” of the parent’s policy during the semester? Remember - not all policies are created equal.
What is the risk of not having coverage?
These risks depend on other external factors including where the student goes to school, the student’s level of maturity (I have found that there are very few mature college students), and whether they live in a dorm or an off-campus apartment. My school, Temple University, which is located in a major city and serves around 30,000 students is more likely to have a higher exposure to various risks than a small college in a rural area. At the end of the day, if a student does not have renter’s insurance they (or most likely, their parents) may suffer financial repercussions.
Lesson learned
I have lived in an off-campus apartment with friends for 2 years now. Not only did I not know that renter’s insurance was even a thing, I had no idea how important it was to have. Luckily, I have not had any major issues myself (knock on wood), but I have had some friends experience, both, property damage and theft. Renter’s insurance is also relatively inexpensive: You can purchase it for around $200 annually. So yes, Mom, after asking me countless times about it, I will now be purchasing renter’s insurance for my upcoming school year. (Moms always know best but never tell them that or they will haunt you forever!).
So…what are the options?
While renter’s insurance should be considered, there are steps that can be taken to lower the risk exposure and decrease the likelihood of damage to personal belongings. Safeguards include always locking your doors, not leaving items unattended, and using locks for computers. It is also a good idea to make a list of items in your dormitory or apartment in the event that an insurance claim needs to be made.
One of the first things to look at is your homeowner’s insurance policy. This will typically cover a small amount of loss, but it depends on some of the factors that are discussed above. Dorm insurance policies can also be a viable alternative as deductibles are low, so you could save your home coverage for larger claims.
Parents, this year, as you move your student into the dorms in preparation for the new school year, make sure that they have the proper coverage in place. This coverage can be a homeowner’s policy or renter’s policy to protect them from a few of the challenges they may face during the upcoming school year. For parents and students alike, preparedness is the key to peace of mind.
In order to provide you with, both, student and parent perspective, we asked one of our interns, Jason Glickstein, to contribute to this blog. Thus the reference to living in an off-campus apartment, and Mom asking about renter’s insurance. The entire ALS team, especially ALS Moms, agree with Jason’s statement about Mom’s knowing best.
If you need more information on any of the topics covered in this blog, or need help addressing any risk related issues, please contact Albert Sica, Managing Principal at 732.395.4251 or asica@thealsgroup.com.