It's back-to-school season, and while you're out shopping for supplies and clothes, one more item you should consider purchasing is an insurance policy. Whether you're renting out your very first apartment or buying a used car to commute, you'll want to be protected financially – so here's everything you need to know.
Student renters insurance in Canada
Teenagers are bringing more expensive items to university than ever before. Whether it's a $1,000 smartphone, a $500 flatscreen, or a $2,000 laptop – there is insurance for college students. It’s not a special product, despite marketing efforts indicating otherwise. Student renters insurance exists, but it’s commonly referred to as tenant insurance – and it’s much cheaper than you think.
Tenant, or renters insurance, at its base includes three types of coverages: third-party liability, additional living expenses, and contents insurance. Let’s look at what these mean.
Third-party liability
Suppose a guest injures themselves in the student’s unit or destroys property within the apartment complex. In that case, a third-party liability claim will pay the related medical expenses and repairs. It can also cover legal fees. Unless a student is negligent, this coverage offers peace of mind if they want to throw a party.
Additional living expenses
If a flood or fire damages the apartment, additional living expenses pay for you to live elsewhere. It covers the cost of accommodation and any related expenses like laundry and internet installation.
Contents insurance
Contents insurance protects the valuables, like electronics and gadgets, if they are stolen or damaged. Keep an up-to-date inventory, ideally with receipts, of all your belongings and their costs. It makes for a much smoother claims experience. Yes, there are custom apps you can use, such as Sortly, but a simple Google sheet will also suffice. Just make sure it’s cloud-based so you can access it if a thief steals your laptop or phone.
Contents insurance protects your stuff inside and outside your apartment. If a thief steals something from your car, you’ll also be using your renter’s insurance.
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Does my homeowners’ insurance cover college students?
Yes, students are typically covered by their parent’s home policy, provided the family home is still considered their primary residence. On-campus residence is generally considered a temporary situation, so you should still be listed as a primary resident of your parent’s home. Keep in mind that every insurer is different, so you should speak with your provider to make sure. There may be limitations to coverage types and coverage amounts. You may also want to add a homeowner’s insurance rider or add-on to add protection for the extra contents you’ll be insuring.
But, arguably, it makes more sense to get the student their own tenant’s insurance for two reasons. First, if the student makes a claim, it could cause your home insurance rates to increase. The second is that when your child moves out into a house with friends or gets an apartment, they will need their own renter’s insurance. In other words, your home insurance will no longer cover the university student.
How much is tenant insurance for university students?
It varies based on location, contents, and the building, but policies can start as low as $12 a month and can go up to about $30. So for about $3 to $7 per week, if you can skip one latte or late-night milkshake run per week, you’re good — a small price to pay for protection. To find out the exact cost you'll be paying, you can compare renters insurance quotes online with Ratehub.ca.
Visit our student personal finance guide.
Financial literacy early in life will pay dividends in your future. Learn more with Ratehub's guide to managing your money as a student.
Car insurance for students in Canada
Auto insurance is mandatory across Canada, but student car insurance doesn’t come cheap because historically speaking, young drivers are less experienced, take more risks, and get into more accidents.
However, if you bundle it with your tenant insurance policy, you may be saving up to 15%. Ask the financial aid office if your post-secondary institution has any affiliations with any insurance providers because there may be savings there too. Also, consider telematics or usage-based insurance – an app that measures your driving behaviour – which can you can save money.
To get the cheapest auto insurance, students can also go under their parents’ policy (provided the car is shared and mainly used by the parent) to leverage their safe driving history.
Life insurance for students in Canada
You should consider life insurance as a post-secondary student if you have a lot of outstanding debt that can be passed on – or if you have dependents that rely on you financially.
Government loans, such as OSAP, can be written off completely after the borrower’s death, so you don’t need to worry about passing these on. However, if you took out a private loan with a co-signer, such as your parents, this debt will be passed on to them after death.
If you have outstanding mortgage debt for your university housing, this can also be passed on to whoever inherits the property. Or if you regularly provide income for family members, they may need the financial protection of a life insurance policy.
On the other hand, if you don’t have too much debt that could be passed on and you don’t have financial dependents, life insurance may not be necessary for your case. Keep in mind that getting approved for a policy is easier when you’re young and healthy, and you’ll be offered a cheaper premium.
The bottom line
Give yourself peace of mind this back-to-school season by purchasing the right coverage for your needs. You wouldn't want to be scraping together emergency finances when you have an exam to worry about instead. And for more information on student insurance in Canada, be sure to reach out to a licensed auto, home, or life broker.