Students! Watch out for these insurance pitfalls and loopholes

I never bought any insurance in my university days, meaning I would have been in trouble had my things been damaged or stolen.

But those were the days before smartphones, and my laptop wasn’t really worth stealing.

Things are very different in 2012. Students today are inevitably going to be packing more valuables than their predecessors, making insurance all the more important.

But whether you’ve already bought cover or you’re currently shopping for it, it’ll be a waste of money if you’ve not read the terms properly and find your claim slips through a loophole.

Here are some of the most important pitfalls to look out for to make sure you’re properly covered.

Know your limits

Phones, laptops, tablets and musical instruments will probably be among the most expensive things you’ll take to university with you, so you’ll want to make sure they’re covered against theft or damage.

A basic contents insurance policy should cover these kinds of things, but you need to make sure the single item limit on the policy would be enough to cover a replacement.

For example if your Gibson Les Paul electric guitar was stolen and your single item limit was just £500, you’d have to make up the shortfall yourself to replace it.

Lock down

As you’re probably going to be sharing a place with other students, you need to be extra vigilant with your security.

If your iPad was left in your unlocked bedroom and one of your housemates left the front door unlocked, not only would it be easy pickings for thieves who specifically target student areas, it would also probably invalidate your insurance.

Unless there has been forced entry into the property, the insurer may say that you failed to take “reasonable care “ of your possessions by leaving the room unlocked and turn down your claim.

You’re then without an iPad and you’ve paid your insurance premiums for nothing. Most university accommodation has locks on each bedroom door, so be sure to use yours.

Location, location, location

If you’re taking your car away to university with you, make sure to inform your insurer of your change of address, because if you didn’t and the car was stolen from your university accommodation address, your insurer could refuse to pay out.

Changing your address may result in higher premiums, especially if the crime rate is higher where you’re moving to, and you may have to pay an administration fee – but it’s better than having to buy a new car when the insurance provider refuses to pay up.

The other thing to be aware of when it comes to motor cover is what’s known as ‘fronting’.

Young drivers – those under 25 – pay more for their cover because people in that age group tend to make more claims for accidents and theft. This tempts some families to cut the cost by insuring the child’s car in the name of a parent.

But you should not do this, because fronting is illegal. It could invalidate your policy and get you and the older relative in trouble with the police. And you might struggle to get any kind of cover in the future.

You might wonder how the insurance company would ever find out you were fronting. But what if you had an accident near your university and the car was insured in, say, your Mum’s name at her house 200 miles away? The insurer would dig deeper and, if the truth came out, strife would follow by the bucket-load.

Excess yourself

When the words “students” and “excess” are used in the same sentence it’s usually to do with alcohol, but excess is an important part of insurance.

If you make a claim on your insurance, the excess is the amount you are required to pay towards it. It’s intended to stop people making small, frivolous claims and you need to be sure that you can actually afford the compulsory excess on the policy you’re signing up for.

As well as the compulsory excess you can opt for an additional voluntary excess. The more you volunteer to pay, the lower your premiums will be. It can be tempting to up the voluntary excess to keep premiums down, but don’t set the excess too high because you’re probably going to be a bit strapped for cash as a student.

Make a well educated guess

When you’re taking out contents cover you’ll be asked to disclose the monetary value of your possessions.

Try to get as accurate a figure as possible on this because you don’t want to over-estimate the value and pay over the odds for cover, but you can’t afford to underestimate either as you may find your cover lacking later down the road.

Make an inventory of your possessions and their value to get an accurate figure. This way your cover won’t be overpriced but you also won’t be left with a shortfall when making a claim.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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