For students who live in a dorm, most personal possessions are covered under their parents' homeowners or renters insurance policies. However, some home insurance policies may limit the amount of insurance for off-premises belongings to 10 percent of the total amount of coverage for personal possessions. This means that if the parents have $70,000 worth of insurance for their belongings, only $7,000 would be applicable to possessions in the dorm. Also, most home insurance deductibles are 1% of the dwelling amount, which means that a $300,000 house will have a $3000 deductible apply before any coverage kicks in.
Expensive computer and electronic equipment and items such as jewelry may also be subject to coverage limits under a standard homeowners policy. If the limits are too low, parents may consider buying a special personal property floater or an endorsement for these items.
Students and/or their parents may want to consider purchasing a stand-alone renters insurance policy. This can be an economical way to provide additional insurance coverage for a variety of disasters. Most polices are only $120 per year and can cover up to $25,000 in coverage for personal belongings with only a $250 deductible.