insurance for college students

We went with Worth Ave Group for renters insurance (per university recommendation). I thought the policy was reasonable, but I don’t know how they are if you have to make a claim. There was a garbage can fire in DD’s dorm that caused enough smoke to set off the fire alarms and make DD believe there was a fire as she ran out of the dorm. It can be comforting to know you have insurance in this situation. (Although thankfully not needed as the fire was quickly put out by the RA.) Several kids in another dorm did use their insurance this past year when a pipe burst and caused massive water damage in a handful of rooms. For the ~$100/year, I’ll continue to get it.

@annamom I understand the fear that things will “walk away” when away from home more easily, my point is why does the dollar amount of the item make a difference if it is at home or school? The best advice any agent can give you, with any policy, is to not turn in small claims, it will hurt you in the long run. If you wouldn’t have turned in a claim for the laptop if it was lost/stolen at home (either because it was under the deductible or just not wanting a claim against the home policy) you probably shouldn’t buy a separate policy with a lower deductible to cover it at school. The amount of the loss did not change so it is not a dollars and cents discussion and multiple claims, in the child’s name, can make things very difficult when they go to get their first apartment/condo/house and can no longer be covered from your policy.

Almost every insurance company uses an insurance score to help set pricing and to a certain extent eligibility. This score includes credit history and loss history but does vary by carrier and state. Young adults are generally in good to great shape when they first purchase insurance as their credit is generally good and they have not had any losses yet. If you have a separate renters or student policy, in the child’s name, with a low deductible and several claims are put through it can cost the child hundreds of dollars a year, for multiple years later on.

@iaparent thank you. Can you point me to formula where insurance company uses to determine the rate of a young adult?
For me, to decide whether to buy an insurance is not only based on how comfortable I am with replacing the item (in a way, self-insured LOL) it also depends on how likely theft happens. I checked NSSI just now (thanks for those suggesting), The quote to cover $3000 with $50 deductible is $90/year.

@annamom unfortunately I can’t. The formulas are all proprietary and in today’s world it is near impossible to calculate a price “by hand” it is all run through computer analytic/modeling. That said, every carrier has to file their pricing methodology and structure with each state insurance department so the formula(s) are available and ostensibly could be calculated by hand, if you knew your insurance score. You can contact the insurance department in your state and request the filing for any insurance company.

@iaparent - I understand the negative impact of filing an insurance, but is there a positive result if a student has a policy in their name and never makes a claim during their college years

I am not sure how accurate that filing a claim during the college year can “make gaining insurance difficult/expensive” later. Hypothetically speaking, if I were a graduate student and lived in a high crime area, I would need to pay a higher premium to insure my belongings while in college. and if I did file a claim and eventually I moved to an upper class neighbourhood with much less crime when I get a high paying job, would my insurance be more expensive? Is the risk be a function of me (which follows me later in life) or a factor of my surrounding?

Both. Insurance ratings calcs include elements that relate to you personally and to where you’re living. Complicated and - as iaparent noted - proprietary, so you won’t know how much weight each insurer gives each component. Plus, insurers continually tweak their formulas to attempt to better predict claims, so what is a small factor now may be a large factor in the future.

^^or it can be a non-factor in the future, right?
In this particular case, there is no evidence where a student were to file a claim in college due to theft would negatively impact the student in the future.
I can see unsafe driving follows a person in future application, but I question the accuracy on any claim under a renter’s insurance would cost a person hundred of dollars for many years.
BTW, to extend this argument, people should not buy extended warranty for appliances, true ? (I do not buy it myself but not for the reason of affecting my rating for insurance.)

Yes, insurers can and do use claims history in calculating premiums. Claims filed under the types of insurance discussed in this thread are claims that will show up in the CLUE database, which many (if not all) insurers use for premium calculation. CLUE keeps track of auto and property claims in the same way a credit report keeps track of your credit history. So if you file a claim for a $200 lost jacket, that is a property loss that will appear on your CLUE report. And yes, when you apply for property insurance (like homeowner’s) in the future, any claims that show up on the CLUE report will impact your future premiums.

Insurers all use the CLUE report information differently, though, so you have no way to predict how big an issue this will be. Some will consider the $$$ amount of the claims and some just consider the number of claims you’ve made (ouch - especially if those were for tiny things.) More and more insurers are considering just the number of claims you’ve made as they believe this is an indication you are risky or make risky choices.

I’m a CPA. When people ask me about whether they should buy an extended warranty I almost always tell them it’s not a good choice (with a few exceptions). For renter’s/college insurance I also believe it’s generally better to self insure unless you would be absolutely ruined if you had to replace a particular item; the costs (more expensive ratings on insurance in the future) outweigh the benefits.

Short description of the CLUE database: https://www.insurance.wa.gov/clue-comprehensive-loss-underwriting-exchange

FAQs: https://oci.wi.gov/Documents/Consumers/PI-207.pdf

We used CSI for our eldest. The dorm insurance can have much smaller deductibles than your home insurance which is helpful when replacing relatively small items. We never needed to make a claim but I plan on insuring entering freshman as well.

Milee pretty much hit the nail on the head. I will add, yes by moving to a lower crime area after graduation the “base rate” of a policy will be lower than being in a higher crime area however that is not the only consideration a carrier looks at.

The carrier I most recently worked for used over 150 factors in their computer model for property insurance each weighted differently. Insurance score and prior losses were the 2 factors that carried the most weight and the “territory” of the property was somewhere in the lower third. This is due to redlining laws. In essence the higher crime areas are being undercharged for the risk they present and the lower crime areas are being over charged by government mandate. If high risk carriers were able to charge however much they wanted or needed in high risk areas insurance would be impossible to attain/afford, again hitting the more vulnerable part of the population.

Our D will be a college senior next month. I didn’t purchase any special insurance other than Apple Care for her MacBook computer since we live a great distance away from her college. She is quite responsible so we chose to accept the risks and didn’t purchase any other insurance. She hasn’t experienced any losses, either while she’s been away at college. Reading the online police blotter from her college, thefts do occur on campus, but the rate is quite low and the risk can be managed by students using common sense, attention to their surroundings to ensure they don’t leave valuables unattended, and roommates looking out for each other and their belongings.

I agree with @milee30 that self-insurance is the best choice for most people. Tuition insurance doesn’t make economic sense to us and the health and dental plan I have covers our D as long as she is a full time college student.

Most schools offer tuition refund insurance. Often through Dewar’s. It is for medical withdrawals, which includes diagnosed mental health issues as well as any medical problem. When you use that insurance, you get back not only what you actually paid but also any financial aid awarded for tuition (not room and board).

We chose to, we have dorm insurance through NSSI and tuition insurance through grad guard. Regardless of whether I could afford the deductible, I would not claim a loss on my homeowners. We recently used the NSSI policy for a stolen bike and were glad to have had that option and extremely impressed with the service. I plan to renew for my S17 and will most likely obtain it for S19 when he heads off. As for tuition insurance it really depends on the individual situation. Given the amount we are paying for OOS tuition (which is actually tuition, room.board and fees though we’ve chosen not to insure the full amount) it is peace of mind really for me. We may or may not choose to do so for S19 and it is likely that I’d drop it as we get closer to graduation.

We are having to take out insurance due to S being an international. I want to thank every poster here as I have been using your knowledge to assess what we need and which would be best.
The insurer we think we’ll use offers ‘liability coverage’ for $42.12 for $100,000 cover. Should I go for this? Being non-US we hear horror stories of suing - but how real is it? I wouldn’t be buying it as an extra if I were buying a new policy here but then we do have a certain ‘liability’ aspect on our own insurance which comes as standard - so aware of the implications.

I think I posted about this topic years ago. We were faced with the possibility of having to withdraw my son from his private high school for medical reasons early in a semester, and found that we would have owed full tuition anyway. I always took out tuition insurance for both sons after that. Tuition insurance is pretty inexpensive. It does cover a limited scenario - withdrawal due to a diagnosed medical condition confirmed by a medical professional. Before my son’s experience, I had never considered taking out tuition insurance.

In a school that does not offer tuition refund insurance, we not only had to pay tuition after a withdrawal, but had to pay back financial aid, so we ended up paying quite a bit more than our original payment of tuition.

With insurance the opposite happened: we got both tuition and financial aid paid to us.

We used CSI for both my kids. The price is reasonable (just over $100/year) for $4,000 of coverage with a $25 deductible. The good thing about it vs. homeowners insurance is that it will cover things such as negligence - like when DS2 dropped his laptop off of a deck. They replaced the cost less the small deductible. Same if he had spilled a Coke or something on the keyboard; often homeowner’s will cover theft, but not negligent damage (plus the much higher deductible and the “ding” on our account). The coverage is year round, so also covers them over holidays and will also cover them when they are studying abroad. I am not generally a fan of extended warranties, etc but I really felt this was worth it.

@Whistlingal I would say yes. We have seen an increasing number of claims and lawsuits generated by social media; bullying, slander, etc. and given social media is the main form of communication for the college age group the chances are real. I always advise people that liability is the cheapest insurance you can get and I have never had someone that wished they hadn’t purchased liability coverage.

@my2sunz Depending on the carrier those negligence claims are covered, I would never recommend a homeowners policy that was not all risk to a client. The deductible is a consideration however I always go back to why do you need insurance at a lower deductible, covering a spilled Coke, when the the child is 18 and at school as opposed to when they were 16 and living at home? My child became more responsible as he aged and I had less concern over dropping a laptop or spilling on it. Lastly, yes your homeowners policy did not take a ding but your child’s insurance score did take a ding and that will follow him later in life when he will be a “new” client as opposed to you taking the ding (either through paying the loss yourself or a claim on your record) where you have longevity with your carrier and are probably more financially able to take the ding.

Thanks @iaparent - I’ll put it in the basket.