Inside Money: Covering kids’ ‘stuff’ at college

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While most homeowners insurance policies will cover your student’s belongings at college, you should check with your company or agent to be sure. (Thinkstock)
AS YOU PREPARE to send your college students back to school, buying stuff for their dorm room is probably high on your list. But you might be forgetting about an important protection: making sure your kids’ belongings are covered by your homeowners insurance policy.

“Most will extend coverage for the child’s personal property to a limit equal to 10 percent of the personal property limit that (parents) have for their home,” says Paul Joyce, co-owner of the Richland Knowles Agency in Summit.

While most policies will cover your student’s stuff, you have to check with your company or agent to be sure. Here are six items to ask about:

1 | What is your coverage? 

Your homeowners insurance lists specific coverage amounts for your property, and also limits for your student’s belongings. If your home is insured for $500,000, Joyce says, your personal property coverage is probably between 50 percent and 70 percent of that value. Let’s say you’re covered for 60 percent or $300,000. That means the carrier would probably cover 10 percent of that amount, or $30,000, for your student’s stuff.

2 | What’s the deductible?

Even if your student’s property is covered, you’ll have to weigh whether you want to make a claim. That decision, in part, should be based on your deductible. “We might hear the laptop got stolen and it’s a $300 item, and there’s a $1,000 deductible on the policy,” Joyce says. That means unless you had more damage in which the losses were greater, your policy won’t do much. You can ask about adding a rider.

3 | What about liability?

While parents would love to think that their college students are angels, there are times when kids do stupid things. Or accidents happen. Ask your insurer what kind of liability protection your child has if the child, or your family, is named in a lawsuit that arises from your student’s actions at school.

4 | Off-campus housing considerations

If your student has opted out of the dorms and is, instead, renting an apartment, most insurance companies won’t automatically extend coverage from your policy to that new location. “You either have to buy a renter’s policy for the child or add the off-campus housing as a location on your own homeowner’s policy for both property and liability coverage,” Joyce says. If your student is signing a lease, be sure to see if there are insurance requirements for the renter, and get whatever coverage is required so there are no surprises later. Also note that your student’s policy won’t cover a roommate’s stuff. The roommate will have to get his or her own policy.

5 | Off-campus liability

It’s one thing to have a wild party in a dorm room, but it’s something else if your child hosts a shindig in his or her off-campus apartment. “I’ve heard of where kids have a party at the apartment, then they go out and they do a few bars, and then something happens,” Joyce says. “If they tie it to the kid, the attorneys would go after the bars, but they could also go back to where they had their first drink.” So you need sufficient liability protection.

6 | All-risk or named perils

Personal property is covered one of two ways. A “named peril” policy will have a list of circumstances and definitions that describe what is covered and when. If your circumstance isn’t on the list, your loss is probably not covered. That’s important, especially for young people who do not always act responsibly. Take that missing laptop. Your student may not be sure if it was stolen or if it was innocently misplaced. “There is a definition of theft, and that doesn’t include unexplained disappearances,” Joyce says. “You have a list of perils where the burden is on you to say, ‘I had peril No. 17.’ ” If you want more comprehensive coverage, consider a policy that covers “all risks.” Under this type of policy, the insurance company must point to a specific exclusion if it says your incident isn’t covered, Joyce says. Such policies are more expensive, but you get what you pay for.

7 | Ask the college

If your student is staying in the dorms, ask the college about any policies it may offer. “Some colleges will offer coverage for dorm rooms that a parent can purchase through the university,” Joyce says. “You can likely find a policy with a more kind deductible of $100 or $200.”

Karin Price Mueller, the founder of NJMoneyHelp.com, writes the Bamboozled consumer affairs column for The Star-Ledger, and the Money and Biz Brain columns for Inside Jersey. Send your money questions to her at Bamboozled@njadvancemedia.com.