Young, Fabulous – and Insured
Coverage for co-eds and young adults
September 9, 2011
By Amanda Prischak
Insurance isn't usually top of mind for young adults heading off to college or renting their first apartment. (It wasn't for us at the time, either.)
But, like mom and dad always say, with freedom comes responsibility—in this case, the responsibility to protect yourself, your belongings, and others by taking out renters and auto insurance policies.
“For many young people, leaving home means taking on new freedoms and developing a sense of responsibility," says Loretta L. Worters, vice president of the Insurance Information Institute. "Part of that new responsibility means having the proper insurance to protect valuable belongings.”The good news is that many young adults don't even need to take out additional policies; and, for those who do, some policies cost mere cents a day. That should be good news to both young adults and the folks who taught them the many meanings of "safety first."
Protect your (temporary) home
Dorm dwellers and apartment renters alike should definitely get schooled in insurance. Young people who are not full-time students or who are over age 24 will want to learn even more.
"When kids are away at school, they're considered residents of their parents' household and are covered to the full limit of the parents' homeowners or renter’s policy until they're 24," says Terry McConnell, ERIE’s vice president and manager in Personal Lines Underwriting. This holds true for dorms and apartments as long as the young adult is a full-time student and maintains residency in their parents' home—which they must have lived in directly prior to moving out—as their permanent residence.
Things are a little stickier with non full-time students and renters who are 24 or older. To protect this group's personal property against damage from fire, smoke, theft, vandalism, lightning and other common disasters, they'll need to take out a standard renters insurance policy, such as ERIE's Tenantcover Policy.
This policy offers personal property coverage, loss of use (coverage that kicks in to take care of living expenses associated with a temporary relocation), personal liability protection, and medical payments for damages or injury that occur in your rental unit or as a result of personal activities away from home. And, like a homeowners policy, you'll have worldwide coverage that protects your possessions when you're anywhere away from home, whether in an exotic locale or at a friend's place across town.
Tenantcover protection (including liability protection), which starts at $100,000 and goes up to $1 million, typically costs less than $100 a year and costs far less when paired with an ERIE auto policy. It's recommended that renters consider at least a personal liability limit of $300,000 and that they opt for replacement cost over actual cash value.
"In an actual cash value settlement, if something happened to that T.V. you've had for 15 years, you'd receive the money it was worth with the depreciation factored in," McConnell says. "With a replacement cost settlement, you'll be able to buy a brand new T.V. There's a small difference in premiums between the two, but the value it provides Customers dealing with an unfortunate situation is significant."
Tips to keep your stuff safe
Even with a renter’s insurance policy in place, it still pays to practice some tips to stay safe and keep claims in check. Here are a few to get you started:
- Safeguard pricier items—or just leave them at home. Dorms and rentals experience up to 50 percent more incidents of theft, with expensive bikes, jewelry, watches and laptops being some of the biggest targets. So take care to lock them up or leave them at a trusted residence that doesn't have a high level of foot traffic.
Renters should also be aware that ERIE has a $3,000 coverage limit per item for theft of such things as jewelry and watches. So, if a prized possession is worth more, make sure to take out an additional personal inland marine rider (also known as a "floater") on the policy.
- Lock your doors. Sounds obvious, but most dorm thefts occur during the day.
- Fireproof your home. Don't leave candles, cigarettes and grills—the most common causes of fires—untended. To be extra safe, consider flameless candles, indoor grills and simply kicking the habit.
- Engrave electronics. Engravings make it easier for police to track down stolen computers, televisions and iPods.
- Create a home inventory. By saving all receipts from major purchases, making a detailed list of everything of value in your home, and photographing or videotaping your possessions, submitting a claim will be easier and you’re more likely to receive reimbursement for what's stolen or damaged. To make the process a cinch, the Insurance Information Institute offers free online home inventory software at Know Your Stuff.
- Consider adding Identity Recovery coverage to your policy. Young people are more likely to experience identity theft due to the extra time they log on the internet. Luckily, for just $20 a year, ERIE will do the dirty work of restoring your good name and reimbursing up to $25,000 of fraudulent credit card fees if it happens.
Protect your wheels
Students who leave their cars at home—or those taking them to campus while keeping the car's permanent address at their parents'—can stay on the family policy. (If you garage it at home while you’re away at school, ERIE will knock up to 25 percent off your premium.) Things change, however, when the car permanently moves with the young adult.
"When you go out on your own, you'll need to purchase your own policy under the new address and change your driver's license if you're moving permanently out of state," says Dave Freeman, a vice president and manager, Personal Lines Underwriting.
Like all ERIE auto Customers, less experienced drivers enjoy knowing they have additional coverage along with their standard comprehensive coverage at no additional charge or premium.
"Young people are more likely to take advantage of our lockout coverage that pays up to $50 off a locksmith's fee," says Freeman. "We'll also pay for a rental car or a taxi if the car is out of commission due to a covered loss." (Learn more about these and other built-in extras on ERIE’s Web site.)
Freeman adds that drivers should also consider optional coverages such as road service assistance that provides reimbursement for towing, labor or transportation expenses; uninsured or underinsured coverage if the other driver doesn't have auto insurance or enough of it; your injuries, and medical payments to cover medical or death benefits in the event of an accident.
Tips to keep your car safe
Lower the odds of experiencing any of these unwanted situations by following a few smart pieces of advice. (They'll also lower your premiums and the chances you'll have to shell out to cover your deductible—an added bonus since, like most insurers, ERIE doesn't offer drivers the more inexpensive adult rate until they turn 24*.) * ERIE will use the adult rating at the renewal date following your 24th birthday, while many other insurers don’t offer adult rates until well into your late 20’s.
- Be a conservative driver. You'll not only keep yourself and other motorists safe, but also give your wallet a boost. "The biggest things that drive up premiums are accidents and tickets," says Freeman. Obey posted speed limits, observe the rules of the road, and, most importantly, avoid calling or texting while driving.
- Stick to a maintenance schedule. Mom and dad aren't taking care of things anymore, so show your car some love by maintaining it Check the air filter, automatic transmission fluid level on the dipstick, accessory belts, brake fluid, battery, power-steering fluid and coolant. Also check the windshield wipers and amount of windshield washer fluid, hoses, wiring and the oil level on the dipstick. Also check the tires and keep them properly inflated.
- Guard your key. More often than not, cars get stolen when owners leave keys out in the open or somewhere obvious like under the mat or visor.
- Take extra precautions with used cars. Some—like inexpensive reconstructed title cars that have been rebuilt after being damaged—are unreliable. "For about $50, you can know for sure by having a mechanic look it over before you buy," says Freeman.
- Keep an extra long distance from—or just avoid—certain vehicles. Rochester Agent Rhett Van Scoter says he sees a lot of windshield damage that results from debris escaping from landscaping and dump trucks. His solution: pull over and let them pass.
- Hide the high-value stuff. Van Scoter says most thefts occur when items like GPS devices, computers and iPods are left out in plain view of passers-by. Reduce temptation by putting them in a bag or storing them in your trunk.
On another note, if you think parking in a bustling area lowers your risk of theft, think again: "A smash-and-go theft takes less than 30 seconds, and most thefts occur in parking lots with a lot of foot traffic," says Van Scoter.
Amanda Prischak is a freelance writer living in Erie, Pa. She'd like to thank her parents for covering her "excessive amount of stuff" under their ERIE homeowners policy during her college years.