<p>I did not get dorm insurance for my student in August… things were just busy and it fell through the cracks. However, I just got my son an expensive cell phone, and of course they tried to sell me the monthly insurance plan. I remembered reading about people on this site that dorm insurance would cover cell phones. Dorm insurance is significantly cheaper than just coverage for the cell phone… So thanks for the suggestion, and for those like me who have procrastinated, consider it now.</p>
<p>For those who might have missed previous discussions about this product, CSI and NSSI are the top two providers of this product. The advantages being coverage of accidental breakage, mysterious disappearance or loss as well as theft of virtually all personal property - there are some limitations typcially for bikes and musical instruments - anywhere in the world. Other advantages are a low deductible and claimss not being counted against the parents homeowners policy. A $5,000 policy is in the range of $130 +/- for the year.</p>
<p>When I looked at the verizon cell phone insurance, the monthly rate was outrageous. As an alternative, AppleCare Plus is an excellent deal for iPhones. (Yes, it won’t replace it if it is lost, but my kids KNOW that if they “lose” their phone, it’s on them to purchase a new one. It’s amazing how much more careful they are when it is their own money. hehe)</p>
<p>engineer4life–oh, BS that they need to look for a cheaper college. For $160/year I will take the insurance and not have to pay out $5000. Being an engineer I would think that you understand the math behind that. Wanting to and not being able to are two vastly different things. Insurance is not only for risks we cannot assume on our own. If our house burned down and we lost everything, we COULD cover it but we don’t WANT to cover it. I’d rather sign the back of the check then the front in a situation like that…</p>
<p>Sure, I understand that if you believe it is highly likely to have a $5000 loss, you would want to pay out $160. However, if you have the insurance policy for 5 years, you would have paid $800, or 16% of the total maximum insured value. And I don’t think most studnets would likely have a $5000 loss. Most losses might be a few hundred, which means you are easily paying many times more for the insurance than you are for what they’ll pay out.</p>
<p>You also must remember that the $5,000 (or whatever amount you obtain) is a per incident limit - not an annual limit. So, if spill a Starbucks/Coke/beer on your PC one month, then drop your laptop and crack the screen the next month and then are unfortunate enough to have your PC stolen the following month, all would be covered losses. Now, previous posters have indicated that the insurance company will likely refuse to renew your policy if you have more than two substantial claims in a year. However, since there is no underwriting for these policies, if CSI drops you just get a new policy with NSSI.</p>
<p>I got a CSI policy for my DS when he was a freshman and we had to buy a higher-end laptop that he needed. Knock on wood - he is now a junior and has had no problems with the PC; however, he did have $1,200 in name brand designer clothes stolen from his dorm laundry service. So I am way ahead even if he never has another claim.</p>
<p>While I can write a check for $5,000 without even having to transfer funds into my checking account, I prefer to pay $131 per year and know that my maximum out of pocket is $25 per occurrance for DS’s property.</p>
<p>I’ll stand by my math that CSI/NSSI, on average, receive more in premiums than they pay out in claims, and therefore, more families pay more in premiums than they receive back in claims each year.</p>
<p>There are gobs of storeis on here about the $1200 in designer clothes that were stolen or the laptops that get beer spilled on them or the like, but it’s clearly not typical of most families otherwise insurance would be a lot higher.</p>
<p>While insurance companies don’t normally break out profitability data on individual lines of business, the secret of insurance is that property and casulty insurance companies are very happy if they just break even in the underwriting of insurance. The key measure is called the Combined Ratio. A Combined Ratio of 100% means that claims and operating expenses equal premiums. An insurance company is overjoyed whenever the Combined Ratio is less than 100%. </p>
<p>As a point of reference, for 2011, the Combined Ratio for all U.S. P&C companies was 108%. On average, the insurance companies paid out $108 for every $100 of premiums received. The profit a P&C insurance company generates is almost always the result of its investment income and gains on their substantial portfolios! While it may be possible that dorm policies have a better Combined Ratio than the P&C industry as a whole, if this product was extremely profitable, I bet more than two companies would enter this line of business. </p>
<p>Insurance that is not legally required is always a value proposition. Some people refuse to buy insurance since they believe nothing bad will ever happen to them, others buy almost every available policy. Some people can’t afford to buy any insurance, even if legally required (so everyone else has to buy uninsured motorist coverage) while others are so wealthy they can self insure virtually any risk. Many people insure the largest risks and assume smaller risks - the question is how do you define smaller risk.</p>
<p>GolfFather - yes NSSI offers two options. However, the “recommended” option that includes accidental breakage is the same price as CSI. CSI only offers a policy that includes breakage. </p>
<p>When I talked with my agent, the biggest problem with using a rider on your homeowners insurance is the effect of claims. Claims made by your student will “count” against the parent’s policy. With many companies, two claims, even if several years apart, will get you non-renewed - let alone the loss of “no-claim discounts”. My agent advised me to get one of these policies instead of the rider - even though she didn’t get a commission. YMMV.</p>
<p>BTW, since it was mentioned, if you need a warranty for a smartphone, look at SquareTrade. Cheaper and covers accidental damage and losing it. Recommended by David Pogue as well as by me.</p>
<p>I learned the hard way. S had his Apple laptop stolen from his on campus apartment. Got insurance right after that.</p>
<p>With kid number 3 we learned and took out CSI insurance a few days before she moved into the dorm. She likes to do homework on her bed, bed is raised. I thought to myself at move-in that set up was an accident waiting to happen. Day 4 she was reaching down to put her laptop on the desk. Slipped out of her hand. Screen broke. She filed a claim, found a place to replace it and we got a check for $180 in the mail within days.
We also have Iphone insurance through SquareTrade for her. It started to have a problem turning on and she filed a claim and they sent her a replacement refurbished phone without even looking at the old phone. I think she had a choice of a refurbished phone or sending her phone in for repair.
Your homeowners insurance might cover the dorm but the hit you would take on your premium isn’t worth filing a claim for a laptop.</p>