The high-risk life pushes up insurance costs for students: Young people who rent property in the wrong area might have to pay nearly pounds 100 for pounds 1,000 of cover. Paul Gosling surveys the market

WITH THE new academic term approaching a student's mind turns to finding accommodation. It should also turn to insurance, and renting property that is secure and in a low premium area, insurers suggest.

The leading insurer in the student market is Endsleigh, which is partly owned by the National Union of Students. Endsleigh offers a basic policy providing pounds 2,000 of cover, for premiums starting at pounds 27 a year for a student living in a hall of residence, rising to pounds 99 for those in shared accommodation in a high-risk area. For pounds 4,000 cover, premiums range from pounds 47 to pounds 236. In the highest-risk, inner-city areas, only the more limited CityPlan policy, which provides cover up to pounds 1,000, and costs pounds 99 a year, is offered.

Basic Endsleigh policies cover individual items only to a limit of 10 per cent of the total sum insured. Thus on a pounds 2,000 policy, if items costing more than pounds 200, such as a computer, are stolen, the payout will be only pounds 200. Students can add all-risks cover, which will pay out on items lost or stolen outside their home. It has no limit on individual items but costs from pounds 3 to pounds 10 per pounds 100 covered.

From this year, Endsleigh's policies contain, as standard, cover against the accidental death of a parent or guardian on whom the student is financially dependent. Benefit payable is pounds 5,000 per year. Students are also covered for up to pounds 50,000 for personal accident or mugging, and pounds 1,000 for damage to a landlord's property.

Norwich Union underwrites an alternative policy for students, marketed by the broker Harrison Beaumont. Basic cover for up to pounds 2,000 costs pounds 28.50 for a student in a hall of residence, rising to pounds 82.00 in shared house, bedsit or flat in a high-risk area. Increased cover and all-risks cover is available. In the worst-risk areas, such as inner-city Birmingham, Liverpool or Leeds, the maximum cover is pounds 1,000, costing pounds 95.

Clearing banks also insure students. Lloyds, Barclays and National Westminster use Norwich Union policies, which start at pounds 28.50 for pounds 2,000 cover, rising to pounds 82. In the worst-risk areas premiums are pounds 95 for pounds 1,000 with Lloyds and vary according to circumstance with NatWest. Midland's standard cover costs pounds 51.75, rising to pounds 123.05, but does include cover for two items of a maximum of pounds 750 each.

Parents' home contents policies may provide some cover, depending on who the insurer is. Policies issued by Legal & General, Co-operative Insurance and Sun Alliance all automatically give some protection to student offspring, but only if they still 'normally' live with their parents - usually defined as spending most holidays and some weekends at home. The extent of cover provided on parents' policies is more restricted than with specialist policies, and some insurers may increase premiums if there are several claims by the student. Co- operative Insurance recommends that students take out their own policies.

Some insurers offer extensions to home contents policies. Commercial Union provides property theft cover for student offspring at monthly premiums ranging from 27p per pounds 1,000 insured to pounds 1.62, according to where the student lives. Insuring against accidental damage costs an additional 18p to 23p a month per pounds 1,000.

Eagle Star allows most policyholders an extension for students, but may decline if there is a bad household claims experience. Costs with it vary between 37p and pounds 1.85 per pounds 100 insured, per year.

Neither Commercial Union nor Eagle Star offers free-standing policies to students, except to some mature students. General Accident says students living away have never been covered by its policies.

Several universities, such as Lancaster and Exeter, have negotiated local deals with Endsleigh for cover within halls of residence. These are typically about pounds 10 a year.

Students are bad risks and unpopular with insurers. Shared accommodation is difficult to secure, likely to be in areas with many burglaries, and left empty often and predictably. Students are warned that thefts and losses are most likely during the confusion of the first few days of term.

Insurers recommend that premium costs and property security should be considered when accommodation is chosen. Louise Clarke, press officer of the National Union of Students, agreed students should take out policies, but said that insurers' advice was often impractical.

'Students are not really in a position to choose where they live. They are short of money, and they may forgo insurance. But they do tend to get burgled a lot.'

Endsleigh Insurance can be contacted on 0242 223300, and details of the Harrison/ Norwich Union policy can be obtained on 0865 65130.

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