Insurance
Student finances are tight at the best of times, so buying contents insurance might not be high priority for many. But if you are a student living in a hall of residence, private rented or shared accommodation, insuring your personal possessions against theft or damage is a necessity and you should ensure that they are covered correctly as soon as you arrive at university.
Getting insured
Many students believe that their belongings will be covered by their parents' household insurance even when they are away at university. This is not true. Parents may be able to add you to their own contents insurance policy however, their policy may not cater for the type of cover you need. Many standard home contents policies will only cover students if there is clear evidence of a break-in, as opposed to a ‘walk-in theft’, one of the most common types of theft experienced by students.
Most specialist student policies can be tailored to your exact needs, with optional add-ons including cover for valuable items outside of your room including laptops, jewellery, musical instruments, bicycles and sports equipment.
Choosing an insurance company
Each company you find may provide different levels of cover for different items. Make sure you find the one that suits you best.
Choosing the right cover
Your insurance should cover your possessions in case they are damaged or lost as a result of fire, vandalism, theft, burst pipes, floods and storms. Items usually covered include:
Electrical items - TVs, DVDs and VCR equipment, CDs and DVDs, Sports equipment, Clothes, shoes etc, Laptops, Desktop PCs (up to a certain value) and printers, Computer accessories, iPods and MP3 players, Mobile phones.
Check whether any of your items are not covered and whether you need to take out extra cover for example to include:
Bicycles,Computers (over a certain value),Musical instruments.
Make sure you know exactly how much you own so that you can take out the right level of insurance cover.
Types of cover
The majority of student policies operate on a ‘new for old’ basis. However there are two types of cover you can chose:
New for Old Cover
The insurance company pay the cost to replace the goods with new items. A person with this type of cover has to value his/her possessions at today's prices and pay the appropriate premium.
Indemnity Cover
The insurance company pays only to restore items to the condition they were in before the loss/damage occurred and, therefore, it may not enable you to purchase a replacement.
Example: A 10 year old TV
· New for Old cover: Cost given to replace with new TV.
· Indemnity cover: Wear and tear plus depreciation is deducted.
Once you have chosen your insurance company and decided on the cover that you need, complete the proposal form.
Ensure that you give truthful information to the company when completing your proposal – incorrect information could lead to your policy being deemed invalid and they may refuse to pay.*
Check how much your possessions are insured for and on what basis.
Check to see if there is any part of the claim that the insurance company won’t meet (the excess), whether the cover continues in the holidays and what your obligations are.
Check again to see exactly what is covered and what is not covered.
The policy document you will receive gives the details of the cover for your belongings and is a record of the contract with your insurer. You must keep it safe as you may need to refer back to it at a later date.
*When a person wishes to take out an insurance policy, he/she must first complete a proposal form. All the questions on the proposal form must be answered fully and honestly, because the answers form the basis on which the insurance company decides whether or not to accept the risk and issue an insurance policy. However, because insurance companies are exempt from the Unfair Contract Terms Act 1977, a person may have answered all the questions correctly and still find that his/her claim is being refused. The refusal may happen because the person:
· Did not inform the insurance company of some fact which may have affected the decision of the insurance company about issuing the policy. This is known as 'failure to disclose a material fact'. A person who has taken out insurance has an obligation to inform the insurance company of anything which may affect the insurance risk, even if there is no question on the subject on the proposal form. If a person is unsure as to whether something is a material fact, it is advisable to inform the insurance company anyway, to safeguard their position.
· Did not inform the insurance company of a change in circumstances after the policy had been taken out. For example, if you move house, you usually have to tell the insurance company immediately in writing. The answers given on the proposal form are the basis of the contract and are sometimes known as 'warranties'. If any of the answers are untrue the contract becomes invalid and the company does not have to pay out in the event of the claim. This can be the case even if the answer that is untrue is not important in terms of the insurance company assessing the risk, although if a claim is refused for this reason, it is worth challenging the decision. If a person believes that the answer he/she has given is true but it later turns out not to be true, this may also invalidate the policy. When a person signs the proposal form he/she is responsible for everything that is written on it, even if he/she did not fill it in him/herself.
Key points to remember
· Make sure you know exactly how much you own so that you can take out the
right level of insurance
· Consider specialist insurance cover – Most standard policies, including your
parents’ own, may not be reliable enough.
· Be vigilant in your halls/student house – unlocked doors or open windows are
just the invitation a burglar might need
· Make sure your insurance policy covers you for walk-in-theft
Further information to be aware of:
What will the premium be?
The premium that you pay for the household contents cover will vary according to the following factors:
· Where you live - the premium for halls of residence is usually lower than when
living in a private accommodation. Some companies also charge different
rates according to the area of Tyneside you live in.
· The value of the contents being insured and whether the cover is
'Indemnity' or 'New for Old'.
· The extent of the cover, for example 'Basic' or 'All Risks'.
Are you under insured?
It is your responsibility to make sure that the sum insured adequately covers your possessions. If the amount of cover is not enough, the insurance company may refuse to pay out on the claim, or only a proportion of it. For example, if your contents are insured for £1,000 but are worth £2,000, the insurance company may only pay half of any claim that you make. This is known as 'averaging'.
'All Risks' policy
Insurance companies usually require certain items to be insured on an 'All Risks' basis. Such items might include portable or valuable items such as photographic, stereo equipment or jewellery. It should be noted that with basic cover you are not normally insured for loss or damage which occurs outside of the home. For example, if you lose your camera or a valuable piece of jewellery outside of the home you will normally only be covered if you have 'All Risks' cover.
Excess
This is the amount you will have to pay on each and every claim made, for example, the first £25.
Why might your claim be refused?
You might have your claim refused completely and the insurance company must give a reason for this.
· One of the following reasons may be given:
· The cause of the damage or loss is not covered by the policy.
· The item was not covered by the policy.
· There is an exclusion clause in the policy.
· Failure to disclose a material fact.
· Not telling the truth on the proposal form.
· Breach of condition of the policy, for example, not locking all doors and windows.
· Unpaid premium.
· The policy is no longer in force.
· Failure to exercise reasonable care.
· Failure to minimise loss.
· The claim was not made properly, for example, the police were not notified after
the theft.
· Exaggerated claim - not only would this mean that the insurance company would
not pay, you may also be prosecuted for fraud.
Further help and advice
Please do not hesitate to contact Welfare & International Support, Student Services Centre, Ground Floor, Northumberland Building, City Campus, Tel: 0191 227 4127, for further advice or assistance.
