October 10, 2014

Fall’s Arrival and the Return to School of Kids and Grandkids

In Insurance

Young adults are on the move – you’ve packed them up, bubble wrapped precious treasures, the sound of packing tape howling as it seals another box headed to college. The SUV completely stuffed – perhaps a U-Haul Truck depending on the size of the move. Whether it’s a dorm room, off campus housing, fraternity or sorority row house – some insurance considerations come into play.

Does it make sense for your college student to start a renter’s insurance policy (a baby homeowners policy for those away from home) – providing coverage for their household contents and personal liability?

Twenty years ago a boom box, a CD player, Sony Walkman were the most valuable items a young adult took off to school. Today a MacBook Air may run upwards of $3,000. A tablet computer – also in the 3 to 4 figure range. And then factor in an entire wardrobe of everyday apparel of favorite shoes, accessories, briefcase and hand bags. And it’s not uncommon to find that the totals push north of $10,000 or more.

Most homeowners policy extend coverage to your dependent at school. But – here’s the ‘uh-oh’ moment – the deductible (i.e. the out of pocket expense); most individuals today have homeowner’s deductibles of $1,000 to $25,000 depending on the value of the home. For you, the higher deductible plans are a sound strategy that leverages your purchasing power and rewards you with significant discounts. But this deductible is so very high for a young adult that their loss will typically not ever crest your deductible.

And then factor in youth – it’s an amazing time – studying late, on an athletic team, a member of the band or orchestra, working a part time job, juggling classes and social commitments. At times scattered, and fatigued – personal judgment may take a hit. Without even thinking – stepping away from the laptop at the University library and discovering it’s gone moments later… the victim of theft. Rushing out the door to class – forgetting to lock the door behind them. Coming home to an apartment burgled of everything – including their roommate’s stuff which immediately segues to personal liability.

Forgetting to lock that door – and now all of the roommates are looted. How much is the liability? Rushing out the door – and forgetting to turn off the breakfast Panini maker and a house fire blazes – what does that total?

The renter’s insurance policy provides coverage for property (aka stuff) and personal liability (an angel’s halo for damage to third parties). The personal liability component of the renter’s insurance policy provides 24/7 coverage for your young adult. An exhausted, irritable student fatigued by the push for finals during exam season – posts an unflattering remark about a professor on Facebook or Twitter. It goes viral – University Administration becomes involved. Allegations of personal injury and slander raised by the Professor. And voilà – with the properly configured renter’s insurance policy, coverage is activated.

This renter’s insurance policy teaches our young adults valuable lessons – in the care of their stuff; care of their environment. Making smart decisions about liability exposures: hosting a party and evaluating the role of alcohol and its possible implications. In addition it provides a deductible that is scaled to a young adult’s finances ($500 is fairly standard deductible on these policies). Most importantly it backstops a claim against the parent’s homeowners policy, leaving your policy unimpaired by claim and preserving your highly preferable rating for premium discounts. You retain a sterling no-claims record, reserving your homeowners policy for large losses.

The renter’s insurance policy is typically $20 per month or less in cost. And often coverage may be coordinated with your existing insurance agent or procured on campus. For more information please contact Coldstream’s Fit Insurance specialists: Peter Beeson or Sabrina Cross. Contact information at

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