Get Insurance for your Kids in College

Back in the day kids showed up to their college dorms with not much more than the clothes on their backs and a couple of suitcases, maybe a small stereo. A generation ago, laptops were nearly unheard of in college dorms. Obviously, those days are over.

Today college students rely on a small arsenal of laptops, tablets, smart phones and other valuable electronic devices – all critical for socializing, as well as completing homework and studying. Access to a laptop isn’t a luxury for students anymore – it’s a must.

Homeowners vs. Renter’s Insurance

Fortunately, for parents with a homeowner’s insurance policy, most full-time students are covered against theft and other common hazards under that policy if their primary residence is still the parent’s home, even if they are living far from home in a college dormitory.

There are exceptions and exclusions, of course. Insurers usually set an upper age limit of 24 on students they are willing to cover under a parental policy. Carriers will also typically insure 10 percent of the value of the parents’ insured belongings and personal possessions and effects. Because of this, you may not want to rely entirely on your homeowner’s insurance policy to protect your college age child.

Furthermore, homeowner’s insurance is not well suited to covering relatively small losses such as a typical dorm theft. Homeowner’s insurance deductibles tend to be $500 to $1,000 or higher- too high to provide the student with meaningful protection against a stolen tablet or smartphone, for example and repeated small claims over a short period of time could cause your homeowner’s insurance company to increase your rates or can even cancel your policy. Most experts suggest preserving the homeowner’s policy for bigger events, such as a fire, which could cause your child to lose all their possessions.

For a college student living in a dorm, a renter’s policy may be more effective. Renter’s policies are extremely inexpensive in most cases – average costs are around $200 to $300 per year, for about $15,000 in personal possessions coverage, and have lower deductibles that are more appropriate for college students. Additional insurance is easily purchased if necessary.

Auto Insurance

If you own the car your student is driving, then you are still responsible for it, even when it’s being driven by a full-time student. If the car is kept in a new location, such as on or near campus, rather than at the parents’ residence, you must notify the insurance carrier. Be sure to add your child to the list of authorized drivers and remind them that it’s not a good idea to allow their friends to drive the car. Talk to your college student about using ride sharing services or taxis when going out drinking.

Sending your kid to school without a car may be the best choice. The recent rise of ride sharing services like Uber and Lyft is making it easier and more economical for students to function without a car.

As always, speak with your college student about the risks of drinking and driving, texting while driving, driving while distracted, etc.

Umbrella Liability Insurance

You may wish to consider adding umbrella liability coverage to protect yourself and your college-age child. Umbrella coverage kicks in in case there is a claim against you that exceeds the coverage limits of your auto and homeowner’s insurance policies. For example, imagine your college-age child causes a car accident that results in $500,000 in damages to another party. Your car insurance policy only covers $200,000 in liability. In that case, your umbrella insurance policy will cover the difference, up to the limits of the policy.

Health Insurance

Under the Affordable Care Act, parents are generally entitled to keep full-time students on their own policies until the age of 26. Keeping your college age child on your health insurance plan, whether individually-owned or employer-sponsored, is usually preferable to enrolling them in the college health plan, because coverage is typically more limited with these plans. For example, many of college health plans limit catastrophic coverage to $50,000 per accident or illness, and exclude injuries that are incurred as a result of alcohol or drug abuse.

If your health plan is a health maintenance organization (HMO) or preferred provider organization (PPO), take a look at the available network of care providers. These models of care rely on narrower networks of approved care providers to control costs. They may not have any approved in-network providers near the college campus at all.

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