Insuring the student lifestyle
Many students just heading off to university for the first time dutifully buy car insurance or health insurance (in the case of foreign students), but how many students immediately think about buying contents insurance? It sounds boring and unnecessary, especially if your landlord says they have insurance, but assuming you don't need home insurance because you're a tenant is not a good idea.
Here are some reasons you need to remember to purchase content insurance when you're buying student insurance, and some ways to get this type of insurance cheaper (since students need to save every pound).
Buildings cover protects the structure, not possessions.
If you are renting like most students do, don't assume that you don't need insurance because your landlord has buildings insurance. This insurance merely covers the cost of repairing a damaged building in case of an accident. The landlord is required to have this type of insurance, but it does not cover the contents of the building – only structural damage. Buildings insurance is a must-have if you have a mortgage like some students who are starting a family, but most students don't need to worry about it since students typically rent. Your landlord must also notify their insurance company that they rent out the building if you're a lodger rather than in an apartment building.
Contents insurance protects items against perils.
If there is a fire, flood, vandalism, theft, lightning damage, or another type of damage, a standard contents policy should cover the cost of replacing or repairing your possessions. Most households have £30,000 or more of possessions, but students often have about £5,000 of possessions in their home. This doesn't mean you don't need insurance, unless you can afford at this very moment to pay that much money to replace everything you own. High-value items may not be covered, however.
High-value items must be insured separately.
Each insurer has their own limit on what can be insured under a standard contents policy. For instance, if you own a top-quality bike as your main transit vehicle, you will definitely want to ensure that it is covered or purchase a separate policy so you aren't stranded without transit until you can afford another bike if it gets stolen. Computers worth more than £1,000 are often subject to limits on how much the insurer will cover, too.
Know the difference between new-for-old and wear-and-tear policies.
When you're shopping for a good home insurance contents policy, make sure you're paying to get the returns you expect. New-for-old policies typically cost a bit more, but they replace the full value of your goods. If your computer is damaged by a fire in your building, a new-for-old policy will pay the full value (minus any excess) towards repairing or replacing it with the exact same item. A wear-and-tear policy, however, factors in depreciation so you may receive substantially less than what you paid to purchase the item.
Paying for a higher excess may be worth it.
Can you afford to keep a few hundred pounds in an emergency savings account? If so, increasing your excess from a £0 excess (where the company immediately pays) to a level as low as £250 could save you a bundle! The higher your excess, the lower your premiums. Of course, if you do file a claim, the company can require you to pay that amount before they step in to help, so don't increase it beyond what you can afford to pay.
Don't take the first policy you find.
Some companies are eager to get students to sign up for their insurance plans but don't give you the best possible price. Make sure you use an online service to find the cheapest possible student insurance that still provides you with the coverage and support you need. You can easily compare policies with online portals and comparison services so you know that you're not paying an unfairly high price.
When you're purchasing insurance, don't forget to buy contents insurance so that your possessions are safe as you head off to school. There's nothing like being able to sleep at night without worrying about disasters in addition to your usual school worries about grades and what your friends are up to now!