Yahoo Finance Why 78pc of students don't need to bother buying insurance
Cash-strapped students who start the new academic year this week can save money in one area – insurance.
Contents insurance for students costs £63 a year on average but can easily rise above £100, according to Moneysupermarket, a price comparison website. Yet most students do not need to buy this at all as they are already covered – provided their parents have contents insurance.
Rating firm Defaqto has found that 78pc of parents’ policies cover their children’s belongings away from the main family residence as standard. Only 17pc of these policies would not cover students at university.
Students living in halls can also be covered by the university's contents insurance, though not all institutions have this.
Students who rely on their parents' policies, however, should be aware of the small print. Two thirds of household contents insurance will pay out for student claims of more than £5,000. But 7pc of deals will pay less than £1,500, which could be less than the value of lost or stolen items.
Some policies may not pay out for accidental damage, which could occur when a laptop or phone is dropped. More than half of deals have no restrictions, but the rest either cap claims costs or do not cover accidental damage at all.
There could also be restrictions on payouts for specific valuables. Most students will have mobile phones, but 7pc of deals will pay £350 or less if these are stolen, and 4pc do not cover phones at all.
This will be of little comfort to owners of expensive phones such as the iPhone 11, which costs £879, or the Galaxy Note 10, worth £999, who will be left out of pocket.
Freshers should also beware of deals that only pay claims for goods stolen or damaged inside student properties but not out and about.
Brian Brown, of Defaqto, said: “There are some good standalone insurance products out there specifically designed to cover student belongings away from the home. However, most students will be already covered under their parents’ policy and so could be paying twice for cover.”
