Back-To-School Insurance Tips For College Students

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As many young adults prepare to head off for college, insurance is probably the last thing on their mind. However, leaving home without proper insurance coverage can spell financial disaster for students and their parents alike. In this podcast episode, we discuss insurance coverage tips that parents and their college-bound students should consider.

Double-check your personal property coverage.

If your student is going to live in a dorm, but keep your home listed as their primary residence, your homeowners insurance policy may cover their possessions in their dorm room or car.

Your homeowners insurance would cover your student’s belongings in the event of fire, theft, or similar perils. However, some policies limit coverage for personal possessions to only 10 percent of the total coverage for personal property. This means that a policy providing $100,000 in coverage for your belongs will only allocate $10,000 to cover your student’s belongings.

If this is the case, then considering adding a floater to your homeowners insurance policy to protect these items. These floaters may provide blanket coverage between $10,000 and $20,000 and may cost approximately $120 per year.

Living off-campus? Consider renter’s insurance.

If your student lives off campus, those posessions will not be covered by your homeowner’s insurance policy. Renter’s insurance – which only costs $15 to $20 per month – can pay to repair or replace your student’s belongings if they are damaged, destroyed or stolen.

Renter’s insurance can provide your student with much-needed personal propery coverage that their landlord’s insurance will not. A standard renter’s insurance policy covers losses from perils like fire, lightning, smoke, water or steam damage from household appliances and structural elements, theft, vandalism, windstorms, and hail.

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Ask about auto insurance discounts.

Good student discount
College students aged 25 and younger who maintain a 3.0 GPA may be eligible for good student discounts. This discount may reduce your auto insurance premium by 5% annually.

Resident student discount
If your student is attending school far away from your home and leaving their car behind, you may qualify for the resident student discount. According to the Insurance Information Institute, if your student attends school at least 100 miles away from home, this discount could lower your bill by as much as 30 percent per month.

Driver training discounts
Some insurers, including Liberty Mutual and Farmers, give discounts to drivers under 21 who complete designated safety courses. These discounts can vary by state and by insurer.

Reduce collision coverage
Is your student is driving an older car? If the car is totaled, can you afford to replace it? If so, consider reducing collision coverage on the car. Scaling back the coverage may cause significant savings, since up to 50 percent of your current premium may be for collision coverage.

Choose the car wisely: new or old?
Many young adults drive older cars because they are cheaper to insure and replace. However, the safety features that most newer cars have, such as anti-theft devices and anti-lock braking systems, can lower premium costs.

Talk to your trusted insurance agent to find out whether an older or newer car for your student will have the lowest premium.

Review your health insurance coverage.

If your college-bound children are under age 26, they have several health insurance coverage options:

• Coverage under your plan. If your plan covers dependents, your student can likely be added or kept on your health insurance policy until they turn 26.
• Student health plans. Many colleges and universities offer their own student health insurance plans. The premiums and features vary widely from school to school.
• Medicaid coverage. Medicaid provides coverage to people with limited incomes, disabilities, and some family situations. Some states are expanding the program to cover all adults below a certain income level. Find out if you or your child qualify.