Why college students living off-campus should have renters insurance

At the end of summer, parents typically pack up their college kids and head to the dorm or off-campus housing. There's the usual checklist — towels, bedding, laptop, and laundry supplies. However, one item can be overlooked: renters insurance. 

Students living in college dorms may be covered under their parents' homeowners insurance. However, college students living off-campus need to purchase renters insurance to make sure their belongings are safe. 

According to Insurance Information Institute, the average renters insurance policy cost $180 per year, or about $15 per month. This is a relatively small amount to ensure that your belongings are covered.

Do college students need renters insurance?

If you're living in a dorm, you probably don't need it. College students living in dorms may be covered under their parents' homeowners insurance policy. Mike Gulla, at Hippo Insurance, told Insider that some homeowners insurance companies offer a "student living away at school" rider, where you list your student's dorm on the policy. 

If you're living off campus, you should purchase renters insurance. Even if it's not required by your landlord, renters insurance helps protect your personal belongings from theft, fire, and water damage. It also protects you from personal liability if someone is injured in your rental. The question is not whether you need renters insurance, but rather can you afford to lose your belongings and replace them yourself?

A cautionary tale from director and actress Issa Rae makes the case for having renters insurance. Shortly after college she received a fellowship in New York City. As The New York Times reports, "One night, thieves broke into her apartment and stole thousands of dollars' worth of equipment, including her laptops, camera and all of her tapes." If she had renters insurance, she would have had her equipment replaced. Instead, it was a total loss and she ended up leaving New York and returning home.

Renters insurance doesn't cover roommates

Renters insurance doesn't cover your roommate. If you have a roommate, each roommate should get their own policy. Renters insurance only covers the insured policyholder. It does not extend to other people living in the apartment or house. 

What if you have to move mid-year?

A component of renters insurance is "loss of use." Loss of use provides reimbursement for temporary housing when a covered event makes your rental unit inhabitable. 

Yael Wissner-Levy, vice president of communications at Lemonade Insurance, told Insider that if a student is evacuated mid-year due to the pandemic, Lemonade allows you to stop and start your policy at any time, so you can move your policy to a new address as needed.

Wissner-Levy explained that in order for "loss of use" coverage to kick in, the evacuation will have to be formally declared by a "civil authority"— like the governor of your state declares an emergency or signs an executive order ceasing all on-campus living — for your policy to cover your accommodations elsewhere. 

She added this is "especially relevant for international students studying abroad in the US — or even just out of state students — who might not have a family support system nearby and perhaps need to rely on a hotel stay for the short term."

Renters insurance companies have different policies regarding "loss of use," so it is best to contact your provider before assuming loss of use applies. If it does, take detailed pictures of the damage and be sure to lock up and secure the premises as well. 

What is renters insurance?

Your landlord has insurance that covers the building and structure, but your belongings inside the rental unit are your responsibility.

Renters insurance is a type of homeowners insurance, known as HO-4, that protects renters' belongings from damage or theft. There are three parts of coverage to a renters insurance policy: personal property coverage, personal liability coverage, and "loss of use" coverage - if your rental becomes unlivable due to damage.

Renters insurance protects your personal property if it's damaged by a covered event, known as an insurance peril. Common insurance perils include fire, smoke, theft, and storms.

Basic home belongings are covered, but you may need additional coverage for specialty items like high-end electronics, special jewelry, fine art, firearms, specialty bikes, and cash in the event of theft. These items may need a "personal article" endorsement or add-on rider.

If you're the campus DJ and have a massive vinyl collection or recording equipment, you'll want to mention that to your agent to make sure you have enough coverage.

If you have a pet, you should inform your agent if you have an exotic animal, large dog, or certain breeds to make sure you are covered. There may be limits to liability coverage if your pet attacks or dog bites a guest. If you fail to disclose the breed or that your pet is an exotic animal, renters insurance may deny your claim.

Wissner-Levy noted that as a renter, you are protected from anything that suddenly causes water damage without any prior known issues like the accidental overflow of water or steam from plumbing, heating, AC or sprinkler systems. You're also protected if your apartment sprinklers go off and soak all your belongings, or if your pipes freeze in the winter and burst.   

How much does renters insurance cost?

The average cost of renters insurance is $15 a month. Some factors that go into determining your premium are the amount of coverage you want, where you live, if you own a pet, and your credit score. If you already have auto insurance, you may get discounts for bundling your renters and auto insurance from your provider.

Here's the average annual premium for renters insurance by state, according to the Insurance Information Institute.

How to find the best cheap renters insurance

Like car insurance, renters insurance can vary a lot by state. Where you live will play a big role in your quote and each company will consider that differently. 

You'll want to shop around and get quotes from several different insurers. Compare the quotes, and look for the most coverage types and limits. Then, look for the lowest premiums that fit your budget. See Insider's picks for best renters insurance companies.

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