Contents insurance for students needs more than a little learning

Insurance is one key essential that, amid all the excitement of packing up belongings to live away from home for the first time, is all too easy for a student to forget. August is A-level month, college now beckons for thousands.

When you tot up the value of your laptop computer, stereo and all those CDs, not to mention mobile phone, books and clothes, the amount comes to a tidy sum, and it is worth considering how much it would cost to replace the items you would not be able to live without.

According to insurance industry estimates, today's students are leaving home with possessions worth between £3,315 and £6,370, mainly because of all the technology they take with them. Yet fewer than 10% of students take out insurance to cover them - which means that most of them are taking a big risk with their belongings.

Students are easy targets for thieves. First, they generally congregate in student areas of towns, after an initial year in a hall of residence. Student accommodation, which is necessarily cheap, tends to be less secure than other rented property in terms of locks and alarms.

Additionally, (perish the thought) students may be careless when it comes to leaving doors and windows inadequately secured. As a result they are sitting targets, and one survey reckons that one student is burgled every four minutes, at a conservative estimate. Of those students who do have a personal possessions policy, one in ten makes a claim, averaging between £500 and £800.

Insurance is, therefore, essential, and not buying it is a false economy. So, if you were thinking of including yourself in the 90% of students who don't bother to take out cover, think again.

If you are going to be living in a hall of residence you may be in luck, as many university halls include the cost of block possessions insurance cover with the rent. You should receive policy details with information about your accommodation. Study the small print carefully, particularly with regard to exclusions, excesses and the sums insured - the maximum value you can claim. Make sure cover is adequate and that anything you particularly need cover for, such as a computer, phone, musical instrument or bicycle, is included. Also check on what basis claims will be settled.

Why "new for old" is worth its weight in gold

The best basis is "new for old", where insured items are replaced at current prices, regardless of their age or condition. Some policies may only give you what you paid for an item, or a second-hand value, which may not be adequate to replace older goods. If an item is not covered, or the maximum sum that you can claim for any item is inadequate, arrange to get additional cover elsewhere.

If you are not going to be living in halls, or your halls policy does not cover you for everything you need, your next port of call for insurance should be your parents' existing household contents insurance policy. Many policies, such as those issued by More Than and Churchill, include student possessions while away from home, and others will allow additional cover to be purchased for a modest additional fee. The important thing is to check your own situation, and dont assume you are covered automatically.

Stand alone cover for laptops and mobile phones can be expensive, and is usually not recommended if you can get inclusive cover elsewhere, such as through a household contents insurance policy. However, where the household insurance policy covers everything else adequately and the problem is just one item, it could be worth considering stand alone cover. If you have a repair and maintenance insurance policy for your laptop or other electrical item, you may find that it also includes theft and accidental damage cover, so dont pay for the same cover twice.

If you can't get cover via your parents' contents insurance policy, or you are worried about a claim affecting your parents' no claims record, you will need specialist insurance for rented accommodation. The most widely used insurer is Endleigh, which is recommended by the National Union of Students. However, do shop around as there are other insurers also specialising in student cover.

Watch out for exclusions, such as for theft without forced entry, or for items left in student accommodation during the vacations. Look for a different policy, or arrange for those items to be stored securely at all times. Finally, having insurance may give peace of mind, but being the victim of theft is always traumatic - so, even if you do have good insurance cover, take care of your possessions and keep your accommodation secure.

12 August 2005 © Moneyextra.com

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