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Do College Students Need Renters Insurance?

By U.S. News & World Report

When you’re packing for college, you may be thinking more about clothes, gaming consoles or the perfect laptop than insurance. Whether you’re heading to a campus dorm, renting a house or leasing an off-campus apartment, it’s important to protect your possessions.

Don’t make the mistake of thinking you’re too poor to need coverage. Many students have personal items — such as electronics, furniture, sporting equipment and clothes — worth thousands of dollars. Plus, college parties are prime opportunities for trouble, including injuries to a guest or property damage to your place.

[See: Basic Money Lessons You (Probably) Missed in High School.]

What renters insurance covers. A common misconception about renting is that the property owner is obligated to reimburse you in the event of a catastrophe, such as a theft, fire or storm. As empathetic as your landlord may be, his or her insurance never covers you.

In other words, it’s your problem if something valuable is stolen from your rental, or you return to discover your possessions destroyed by a fire. It’s not a pretty picture — or an affordable one — especially for a college student.

Fortunately, renters insurance is a bargain for the protections you get in a basic policy:

— Personal property. Protects the value of your belongings from a covered event anywhere in the world, such as damage from a natural disaster, loss or theft. Common exceptions include flooding and earthquakes.

— Liability. Protects you against a claim or lawsuit if you accidentally hurt someone, or a visitor is injured in your rental.

— Additional living expenses. Pays for temporary housing and meals if you can’t live in your rental while covered damages are repaired.

[See: How to Talk to Millennials About Money.]

How to know whether you need renters insurance at college. Whether college students really need renters insurance depends on where they live and the protections extended to them under a parent’s policy. If you attend college while living at home, you’re generally covered by your parents’ homeowners or renters insurance.

If you live in on-campus housing, such as a dorm or a school-owned property, your parents’ home or renters insurance typically extends to you if you’re listed as a dependent on their policy. However, both types of policies cap off-premises coverage.

Let’s say you’re a parent of a college student and get a frantic call from your daughter who’s upset because her high-end mountain bike disappeared from her dorm room. If you have homeowners insurance with $50,000 coverage for personal property, you may only get up to 10 percent for off-premises coverage after paying the deductible.

However, if you set up your daughter in an off-campus apartment or house, your homeowners or renters insurance wouldn’t cover the loss. She would need to have a policy in her name to cover losses or liability claims.

If a student lives off-campus with one or more roommates, they may be able to purchase renters insurance together. While sharing a policy can save money, there are downsides. One is that your roommate’s claims go on your claims history record as well, which may cause you to pay more at renewal. Problems can also arise when a roommate moves out or doesn’t pay her share of the premium.

[See: 10 Costs Homeowners Insurance Doesn’t Always Cover.]

How to shop for renters insurance. You might be surprised that the average renters policy costs just $188 per year. That’s a cheap financial safety net that no renter should go without.

Be sure you understand whether a policy offers cash value or replacement value for claims. The former reimburses you for the value of personal belongings at the time of a claim (the original value minus depreciation) and the latter gives you the full value.

Premiums for replacement coverage are higher than for cash value, but they may be worth it if you have a substantial claim.

Use these three tips to find the best policy:

— Talk to your current insurance provider. If you already have an auto, home or renters policy, find out whether your student can be covered and at what cost.

— Ask your school for advice. Many colleges and universities have relationships with insurance companies that allow students to get discounts.

— Shop around. Get quotes from several insurers by using comparison sites such as insuranceQuotes.com and netQuote.com. Be sure to shop apples-to-apples by evaluating prices for policies that have the same benefits and coverage limits.

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Do College Students Need Renters Insurance? originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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