Why College Students May Need Renters Insurance

College students who are already shopping for laptops, textbooks and other equipment for campus may want to add something else to their list: rental insurance.

Insurance can help pay for personal property stolen or damaged by accidents like cooking fires. Offers liability coverage to help cover medical and legal costs if someone is injured at your place or if someone’s belongings are damaged. And some policies pay for a hotel and meals, if a calamity renders the property uninhabitable.

Students may think they don’t have much equipment, but replacement clothing, furniture, and electronics add up. A stolen backpack with a laptop, tablet and textbooks can easily add up to $3,000, said John Fees, co-founder and CEO of GradGuard, which markets student rental policies.

Students living in dorms may be partially covered through their parents’ homeowners policies, said Loretta Worters, a spokeswoman for the Insurance Information Institute, an industry group. However, this “off-premises” coverage is often less than the homeowners policy’s benefit limit, for example, 10 percent. If the policy covered belongings up to $100,000, the coverage for the bedroom would be $10,000.

“You may not have as strong coverage in a different location,” said Karen Collins, assistant vice president of personal lines for the American Association of Property Casualty Insurance, an industry group.

Some homeowners policies don’t automatically include a student’s residence, so it’s best to confirm coverage, Mr. Fees said. Homeowners policies often have a higher deductible, an amount subtracted from a claim payment, than renters policies, he said.

Some universities may require students to have insurance as part of their campus accommodation contract. And many property owners who rent housing off campus require students to purchase coverage, said Alexandra Alvarado, director of marketing and education for the American Association of Apartment Owners, which provides services to landlords.

“The landlord has insurance on the property itself,” he said, “but that doesn’t include the renter’s property.”

If you have a rental policy, your belongings are often covered even if they are stolen away from home. Ms. Alvarado recalled that when she was in college, her laptop was stolen from her car and her rental policy paid to replace it.

The renters policy does not cover everything. The policy may protect him if someone trips and gets hurt in his apartment, but not if a guest intentionally punches a hole in the wall, Alvarado said: “That’s what the security deposit is for.”

The average annual renter premium was $174 in 2019, according to the Insurance Information Institute. Some policies cost less. Lemonade, an online insurer, offers basic policies starting at $5 a month.

Coverage details may vary by state and carrier. Make sure the policy’s maximum benefit is high enough to cover your belongings. Always check to see if the policy pays for the replacement cost of the damaged property rather than the actual cash value, which may be less, and if it includes exclusions. Policy language can be confusing, so ask if you don’t understand something.

Students with items that exceed their policy’s coverage amount, such as special computer equipment or musical instruments, can add them at an additional cost, Ms. Worters said.

A renters policy typically covers water damage caused by sprinkler systems being activated accidentally or by rain entering through a damaged roof, but generally not by floodwater flowing in from below. For that, you would need a flood insurance policy.

How common is water damage due to sprinkler system accidents? “I wouldn’t describe it as common, but when it does happen, it’s significant,” said Josh Gana, director of facilities and physical environment for the Association of International College and University Housing Officers.

Students can mistakenly activate a sprinkler by knocking a ball around the room or hanging something on a system fixture, he said. Water can quickly soak a room, and attached sprinklers can also damage other students’ belongings.

After a fatal fire in the Seton Hall University dormitory in 2000, more colleges installed fire suppression systems, Fees said. There were about 1,200 housing fires on campus in 2020, according to federal data.

Here are some questions and answers about insurance in college:

No. Some insurers can add a roommate to your policy for a slightly higher premium, Ms. Worters said. Otherwise, your roommate would need a separate policy to be covered.

Not likely. Renters policies typically cover the theft of a laptop, as well as damage or destruction by fire or other “perils.” But knocking the device off a desk and breaking the screen doesn’t qualify. Special laptop plans offered by some insurers and device manufacturers, or an extended warranty or service contract, may provide coverage. However, Consumer Reports found little benefit to extended computer warranties because the cost is similar to the cost of a repair.

Car rates are typically higher for teens. But if your student is out and not driving their car, they may be eligible for a lower rate, so check with your insurer, said Robert Passmore, vice president of auto policies and claims for the American Association of Property and Casualty Insurance.

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