Hey, proud parents. We heard you're about to be an empty nester. Congrats! It was just yesterday that you were sending your kiddo off to kindergarten and cheering them on at Little League games. But somehow, they're now just a few short months away from entering a new exciting chapter in their young adult lives: college.
You and your student have plenty on your plates right now. Your summer will soon be consumed with shopping for living essentials to furnish their new space with, scheduling classes, and ordering textbooks among a long list of other to-do's. But after all the dust settles on this last leg of their college prep journey, don't forget to consider your new student's insurance picture. What will it look like? As they prepare to say farewell to their childhood home and begin this monumental journey, what kind of insurance will they need to protect all the new, shiny things they'll collect? What if they run into a sticky liability situation and need legal counsel?
College students often get so preoccupied with successfully juggling school, work, and a social life that they forget how important it is to protect their expensive technology, school supplies, and dorm necessities they leave behind each morning. Of course, you know the importance of insurance. But you've been doing this adulting thing for a while now. Your student is new to the beautifully complicated grown-up scene. And the last thing they need to worry about as they try to navigate it is coming up with the funds from their stretched-thin wallets - or yours - to pay for those things, should they get stolen or damaged.
So, while we can't help your Freshman determine their major and minor, we certainly can play a role in keeping their belongings safe while they're away in the classroom, picking up an extra shift at work, or hanging with friends at the big game. To save you some time and effort figuring out exactly what their insurance needs are for the eventful years that lie ahead, we created a helpful 5-part guide on renters insurance for college kids.
Ready to get schooled? Class is in session!
Course 1: Renters Insurance, Briefly Explained
We're just going to say it: renters insurance is under-appreciated and slightly misunderstood. The majority of people assume that renters insurance is expensive and that their stuff isn’t worth that much. Therefore, they neglect to look into how beneficial and extremely affordable the renters coverage options available to them actually are. But for college-aged renters, it's eye-opening to consider this:
The College Board reports that between course materials and textbooks, students were expected to spend between $1,240-$1,440 for the 2018-2019 academic year. The average renters insurance premium is between $8 and $21 per month for $20,000-$30,000 of coverage. So, even if your student's dorm has nothing in it, but their textbooks for school, that student’s renters insurance premium would cost less than the out-of-pocket replacement costs for those books if they were stolen or damaged. Renters insurance also covers pricey items like electronics, household appliances or furniture, and even clothing or jewelry, which can add up quickly and be sorely missed if a catastrophe happens.
Renters insurance policies cover more than just damaged or stolen property. Here's a closer look at the standard coverages that come with our renters policies, including a couple of protections that parents will find especially valuable.
Personal Property - All of the things owned by you, the policyholder, that fill up your place is referred to as your personal property on your renters policy. If your clothing, appliances and furniture, jewelry, or electronics get damaged or destroyed by a covered peril on your policy, your renters coverage will step in to restore your loss. Covered risks include fire, theft, and weather events.
Additional Living Expenses (ALE) - If a covered loss, such as a fire, renders your rental uninhabitable, your renters insurance coverage will help pay for your temporary living expenses at a different location. That means if you need to stay in a hotel for a bit and buy new clothing and food to carry you through your difficult time, your policy will take care of those costs until you're able to get back on your feet at a new place. This coverage is typically most appealing and comforting to parents of new college students who have just moved out on their own.
Personal Liability And Medical Bills - If someone gets hurt at your place in a freak accident, your personal liability coverage extends to the injured party's hospital bills or legal fees incurred from a lawsuit. Personal liability coverage also applies to certain damages you may cause by accident when you’re away from your rental home. Your renters insurance coverage follows you wherever you go.
Renters insurance doesn't provide coverage for a roommate's personal property, damage caused by rodents or insects, damage caused by a natural disaster, or damage to the physical structure being rented (that would fall under the Landlord's insurance policy).
Course 2: Determining If A Separate Renters Policy Is Necessary
Before deciding whether your student needs their own separate renters policy, we encourage you to consider these three questions. Of course, we can elaborate.
1. Do my child's belongings have an estimated value of 10% or more of the personal property coverage on my homeowners policy?
How a parent's homeowners policy can offer limited protection to a child no longer living at the property: Your homeowners insurance will extend 10% of its limits to college students who live away from the insured property but reside on-campus. This means that a policy with $150,000 of personal property protection covers your student at school for $15,000 of personal property protection.
If your student plans to continue buying personal property through their college years - as most young adults do - the total value of their belongings will only increase with time. If they accumulate more things, will your personal property coverage be enough to compensate for their items, or will you have to continue raising your insurance limits to counterbalance your student's purchases?
2. If my child chooses to rent an apartment off-campus, do I - or they - have enough money to cover the cost of replacing their furnishings and appliances, technology, and textbooks if they get damaged or destroyed?
When a student opts to rent an apartment or home instead of utilizing a dorm on-campus, they typically have to buy their own furnishings and household appliances to adequately fill the space. And we all know that more stuff means more value - kind of like we mentioned in response to question number one. So, while it's grim to think of their first hard-earned living room set or TV and gaming console getting destroyed by an apartment fire, it's essential to consider the worst-case scenario when coming to terms with the replacement cost of their property.
3. Am I comfortable with having potential claims on my homeowners insurance history due to my child not being able to report a loss on their personal renters policy?
No matter how responsible your student is during their college years, bad luck may find them anyway. Their apartment or dorm could get broken into while they're away. Their identity could get stolen after opening up a new credit card or two. A burst pipe from the floor above them could ruin their new PS5 and flat-screen. Adverse circumstances happen all the time, but that's why we have insurance to protect us financially. Would you rather have more potential claims on your homeowners policy or let your student's renters policy cover their unpredictable misfortunes?
Even if you are able to file a homeowners insurance claim or two, the benefits may be outweighed by the fact that doing so will probably increase your premiums. If filing a claim for a stolen laptop and high-dollar mountain bike causes your homeowners insurance premiums to increase in the future, it might not be worth it.
As you can see, even though your homeowners insurance can extend a capped amount of coverage to your college student, it's typically wiser to have them purchase their own separate renters policy to align with their specific coverage needs.
Course 3: Common Types Of Things A Renters Policy Covers For Students
Just like homeowners want their expensive new roof, master bedroom edition, and tricked-out backyard workshop to be adequately covered, renters wish for the same when it comes to their expensive tech, top-of-the-line mountain bike, and name-brand clothing. Both types of insurance policies are entirely customizable and meant to suit each party's needs accordingly.
Jump in your student's shoes for a minute and consider what they would find most beneficial to protect in their dorm or apartment.
- MacBook Pro
- iPhone/Apple Watch
- Gaming Systems
- Flat-screen TV
- Collections - Cards, Jewelry, Vinyls, etc.
- Streaming Devices
While your student's renters policy won't cover any personal belongings of their roommate's, you can rest a bit easier at night knowing all the property you've both invested in are protected.
And don't forget - a huge plus for parents of renters is the Additional Living Expense portion of the policy's coverage. Say their apartment experienced a covered loss that required your student to temporarily move out of the place while repairs are being made. 20% of their personal property coverage would apply to their expenses incurred from temporarily relocating. So if their renters policy has $30,000 of personal property coverage, your student would have a limit of $6,000 to apply to their financial setback.
Course 4: The Uncomplicated Process Of Buying Renters Insurance
As their parent, you probably think your student will need to go visit with an insurance agent to weigh their renters policy options. While we do encourage annual chats with your trusted, independent agent to ensure your policies all still align with your needs, they aren't necessary for this step in our coursework. That's right, you and your student can sign up for a CFM renters policy conveniently online. It literally only takes five minutes to receive personalized binding coverage.
Click here to check out our online renters platform. The actual policy will need to be in your student's name, but as their parent, you can be listed as an interested party on the insurance to help oversee the policy.
Course 5: Managing Your Renters Policy
As your student grows into adulthood and life gets even busier, they'll appreciate the ease-of-business that comes with managing their first insurance policy from their smartphone. At CFM, that's exactly what they'll get. Having the ability to quickly pay their bill, review policy documents, and file a claim on their renters policy through the CFM Policyholder App, will allow your student more time to focus on making their career goals a reality at college. Once their policy is activated, the last step in your student's renters insurance journey is downloading the CFM Policyholder App.
Hey, hey, it's graduation day! You and your student have completed our vigorous degree program and are now legit Renters Insurance Experts. Too bad this elective class credit won't transfer to your student's academic itinerary (take that up with Admissions, I guess). The good news is you have hopefully welcomed a CFM Renters policy to your insurance family!
One last thing...
Dear cool college kid - if you're ever looking for some additional reading material in between classes and get tired of scrolling aimlessly through TikTok, click the image below and let our renting mascot, Tuck, give you all the deets on your policy coverages, loss scenarios, and more.