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Do you need student insurance?

15th October 2018

As a student it is tempting to think that contents insurance is just another needless cost on an already tight budget. But a small payment per month could save you a huge amount in the long-run. In this article the IMC team walk you through some of the reasons why contents insurance is an essential purchase, and explain some of the more technical aspects of what type of coverage will best suit your needs and budgets.

Why bother with contents insurance?

With multiple people and valuables per student house, often no matter how careful you are, you cannot be sure that those around you are as responsible. The reality is that students are amongst the worst people to insure. Many students will be living alone for the first time and might not be as assiduous in their household safety. Equally, students are frequently out on weekends, meaning that student accommodation can be seen as easy targets for burglars. In fact, unfortunately around 40% of students fall victim to theft. So, while insurance might seem over-zealous, you ought to be careful of dismissing your worldly-wise parents…as frustrating as this might be!

A small payment per month can save you from an unexpected disaster that could both inconvenience and de-rail you and your studies at the worst possible time. Much like life insurance, it is much easier to bury your head in the sand but should disaster strike, you do not want to be left exposed. Insurance can even cover things you might not expect it to. Some insurance policies will offer a 24-hour gadget replacement promise or cover your keys should you lose them on a night out.

Okay, what kind of insurance do you actually need?

If you are renting a property, you should only need to opt for contents insurance. This will cover damage to your property should anything happen to the building such as a fire or a flood. Some other policies will provide tenants’ liability cover. This will protect you and your deposit if you accidentally damage your house. A few even offer cover for tuition fees and rent. This can be crucial if you are an international student, or a postgraduate student, although it is helpful for everyone.

If this is your first UK insurance product many of the terms may be confusing. The most important things that you need in order to understand whether it is worth getting insurance is your excess.

If you want to insure your £500 laptop and your £300 games console, you might agree to pay an excess of £200, in the event that these items are stolen or destroyed. You would therefore receive £600 from your insurer. The benefit of this kind of policy is that it can reduce your premiums (the amount of money you pay) in exchange for a slightly reduced coverage. You will have to weigh up the overall cost of the policy with what you think you can personally cover yourself. It is a good way to balance potential risk with potential unnecessary cost spent on insurance.

Caveats

There are some important caveats that you need to bear in mind when you are looking for a policy. Some of them could end up saving you significant amounts, or mean that you do not need insurance after all. Others mean that you will have to stump up some extra cash if you want your contents insurance provide you with full cover.

If you are living in student accommodation that is owned and run by your university, it will conform to at least one government standard. The first of these is the Universities UK/Guild HE code of Practice for the Management of Student Housing (otherwise known as the Student Accommodation Code). They might also be signed up to Accreditation Network UK (ANUK) or Unipol Code of Standard for Larger Residential Developments.

Both of these provide rules and regulations about the quality, safety, and security that student halls must conform to. This will include things like checking electrical products, updating fire codes regularly and often a 24-hour security presence. As a result, membership can take significant amounts of money off your insurance bill.

Your university halls might already have insurance that will cover many of your possessions. So it is worth checking before you purchase your own. However this is unlikely to cover anything which is damaged, stolen, or lost outside of the accommodation. It also probably will not cover ‘walk in thefts’, i.e. those where the thief simply walked through an open door. It is therefore essential to ensure that your valuables are locked in your room when you are not present.

Renting privately

Private landlords should be insured with building insurance. Other than making sure that it is in place, you do not need to worry about this. Your Student Union should be able to provide you with advice on whether your landlord has comprehensive building insurance, and may even offer a trust scheme which you can use to find accommodation. Your own contents (such as the belongings kept in your room) however, will probably need to be covered by your own policy.

Look out for high-cost items!

It may be that the items which would be most expensive for you to lose are not possible to insure with a student policy. Many insurance companies might not cover your items under their basic student insurance if the individual item is worth more than £1000. Sometimes this is an unavoidable cost, such as with a musical instrument. It might, however, make you consider whether you should really bring your beloved carbon fibre racing bike with you to uni. Similarly you may want to take it into consideration when looking at which computer to buy.

Key Advice

  •      Be prepared to shop around. Getting a good deal takes time.
  •      Prepare to read the small print. There’s no point in getting insurance only to find out when you need it most that it doesn’t do the things you need.
  •      Consider if there are cheaper alternatives. Would your parents agree to put you on their own? Can you avoid bringing certain items with you?
  •      Be realistic about what you can pay. Again there is no point in agreeing to a large excess if when it comes to it you can’t actually pay out the amount agreed upon.
  •      Try and pay in advance. There will often be a deal for students which means that it is cheaper to pay in one lump sum at the start of the year rather than as part of a monthly contribution for no added cost.

As we mentioned at the start, your uni days can be some of your most difficult in terms of finances and budgeting. Although insurance may appear to be an unappealing additional cost it can save you a lot of stress and money in the long-term.

To find out which type of insurance could be valuable to you, it’s important to seek out impartial financial advice. Contact the friendly insurance team at IMC to discuss which policies would be most beneficial in your situation.

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