College students should weigh insurance for electronics

Do college students need special insurance to protect electronics?

When you buy laptops, tablets or other pricey electronics - salespeople often try to sell you special insurance to protect against loss, theft, or damage. That's a particular concern for college students - especially those who'll be living away from home. But don't be pressured into saying "yes" right away. Added insurance can come in handy if your iPad, laptop or other gadget has to be replaced, but you can protect both your gadgets and your budget by doing a little homework before classes start this fall.

Student apartments and dorm rooms are filled with TVs, computers and just about every other high-tech gadget you can think of. Insurance experts say in many instances, those devices are already insured when the student moves into their temporary campus home.

"As long as that college student is a resident of their parents' home, the parents' renters or homeowners insurance extends to that student," explained Karl Newman of the Northwest Insurance Council.

Newman says students are typically protected for up to 10 percent of the content coverage on their parents' homeowners insurance. If the homeowners policy covers $350,000 for the home's contents, $35,000 of that is applied to the student away from home. For a parent with renter's insurance, the maximum $25,000 coverage for contents would apply $2,500 to the student property.

But Newman says you may want to consider extra insurance protection if you're concerned about your electronics breaking down after they're out of warranty.

"Breakdown coverage is not part of a homeowners or an auto policy that you typically get from your insurance company," he says.

Special coverage for electronics is relatively inexpensive. For e-readers, for example, you can buy $200 worth of coverage for around $20 a year, or $400 of coverage for $40 a year - with a $25 deductible. You can get $500 worth of coverage for an iPad for around $40 with a deductible of $50. Premiums vary depending on the device and the company.

Best advice - whether you're buying new electronics or sticking with what you already have, call your own insurance company and find out what kind of protection you have for all your gadgets. Then ask about extra protection. Newman also suggests students consider buying their own renters policy if their living conditions qualify. And if you're home for the summer but left belongings back at school - a word of warning: don't stay away too long. Having insurance won't help if you break the terms of the policy.

"The coverage that does extend from your parents' homeowners or renters policy, sometimes is limited in terms of duration. So if you leave a bunch of stuff at your dorm room and come home for the summer, some companies limit it to 60 days, you've got to go back and check on it," says Newman.

If your insurance company doesn't provide special protection for electronics, ask your agent or broker for referrals to reliable companies that do. The Consumer Federation of America suggests you'll generally get a better deal by shopping around and buying electronics insurance on your own, instead of simply buying the insurance offered at the point of sale.

Just be sure to find out who actually handles the claims, and follow up to make sure the company is reputable. Check for any complaints with the Attorney General and BBB in your state and in the state where the insurance company is located. And never take anyone's verbal promise about what any insurance will cover. Take time to read the policy carefully before you sign.