Replacement Cost Coverage: Does Your College Student Need Renters Insurance?

You’re probably already spending a small fortune sending your kids to college these days, between books, tuition, and day-to-day supplies, but are you overlooking another expense that may prove valuable later on?

If your student lives on campus, it’s likely that his belongings are covered under your homeowner’s insurance policy should they be lost or stolen. However, once your kid leaves campus and moves into a rental property, he is no longer covered by your policy. If someone breaks into your student’s apartment, or if there’s a fire or flood, any damages sustained will be his responsibility financially.

You may expect the property landlord to cover these kinds of damage retributions, but oftentimes the landlord’s insurance will only cover the building itself, and anything within the building is beyond the scope of the landlord’s liability. Additionally, if your student’s roommate has renters insurance, it is likely restricted only to the policyholder’s belongings, and will not cover any other property in the residence.

Renters insurance is available in three different types—personal possessions, liability, and additional living expenses. Personal possession protection will provide replacement cost coverage for anything that is lost or damaged. Liability protection will cover any injuries sustained in the policyholder’s residence, paying for medical expenses and also legal fees should the policyholder get sued in a liability suit. Additional living expense protection will help the policyholder should he be displaced from a natural disaster, covering the cost of temporary residence until he can return home.

Renters insurance is generally quite affordable, costing students $185 annually on average, but the rate depends on the location/size of the rental property and what’s being covered under the policy. Sit down with your student and catalog his belongings, photographing and documenting all valuables in a spreadsheet, and hold onto it for your record, then secure a renters insurance policy that will adequately provide you with the replacement cost coverage you require.

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