Determining Whether Your College Student Needs Dorm Insurance

• College students living on campus can obtain dorm insurance, which is a type of personal property insurance.
• You may need renters insurance or be able to cover dorm contents under a parent's homeowners policy.
• Here's what to consider before taking on dorm insurance.

Parents may be concerned about their insurance coverage for college students' elaborate dorm room decor, as the stakes have never been higher, according to House Beautiful.

Before purchasing dorm insurance, experts advise considering your child's specific needs to determine its value.

Loretta Worters, vice president of media relations of the Insurance Information Institute, explained that dorm insurance is a type of personal property insurance for college students residing on campus.

According to ValuePenguin, insurance policies that typically include coverage for accidental and water damage can cost up to $20 per month.

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In some cases, renters insurance may be sufficient for college students, while in others, parents' homeowners insurance may be sufficient.

Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida, stated that people often purchase insurance unnecessarily.

Experts suggest determining whether you need to purchase an additional insurance policy for your college student's dorm room.

How dorm insurance compares to other options

Dorm insurance is often offered by colleges and universities in partnership with various insurers, according to Worters.

Parents could choose to use a partner for insurance, which may offer a price break, or they could compare terms with other insurers.

Worters stated that if parents choose to purchase a dorm insurance policy, it would be billed separately from the room and board costs.

According to McClanahan, a member of the CNBC Financial Advisor Council, money from 529 college savings plans cannot cover dorm insurance because it is not considered a qualified educational expense.

Experts suggest that your child's dorm possessions are usually covered under your home insurance plan, regardless of whether you sign up for dorm insurance.

According to the National Association of Insurance Commissioners, a college student living on campus and under the age of 26 is usually covered by a parent's homeowners insurance.

Depending on the needs, the limits of the contents in their dorm may be sufficient, as Worters said.

Worters stated that the coverage for a college student's personal property is usually $10,000, which includes items such as computers, TVs, electronics, bicycles, furniture, and clothing.

Worters stated that dorm-specific insurance policies typically have lower deductibles compared to home insurance policies.

McClanahan stated that the home insurance policy will typically cover a child living in a dorm, regardless of whether they attend university in a different city or state.

4 questions to ask before insuring dorm contents

Is your campus safe? While a parent may consider dorm insurance due to high criminal activity or theft concerns, statistics show that most campuses are safe with minimal crime on campus.

Since 2011, the number of on-campus burglaries reported per 10,000 full-time students has been steadily declining, according to data from the National Center for Education Statistics. In 2011, there were approximately 12.8 burglaries reported per 10,000 students, while in 2021, this number fell to 4.7 per 10,000 students.

What are the high-value items in the dorm room? While most items in a student's dorm room are not expensive, a parent's homeowners policy may only cover up to a certain amount. It is crucial to check the limits with the insurance agent or company.

Can you afford to replace stolen items without insurance coverage? Deductibles for homeowners insurance may be high enough that you'd have a significant outlay before coverage kicks in. Additionally, making a claim can negatively impact your insurance rates in the future, as it is considered a "ding" on your record.

Does your student reside off-campus? If so, they might require renters insurance, which safeguards both personal belongings and certain liabilities. The average monthly premiums for renters insurance range from $15 to $30, based on the NAIC.

"Landlords increasingly demand renter's insurance from students who live off-campus, according to Worters."