Congratulations! You have a college student! We understand firsthand how the process of preparing for college varies per family. Here are some important topics to think about when it comes to college insurance, especially if your child is in a dorm, taking a car to college, or studying abroad.
Courts have long determined that a dependent child away at school is still legally a resident of their parents’ household, and some insurance companies do not require any additional insurance coverage. But each company is different, so it’s best to check with us to be sure your child has coverage in all scenarios.
On the most commonly used homeowner’s policies, a student under the age of 24 is covered by his or her parents’ homeowners policy as long as the child is enrolled full-time in school (12 hours or more) and was a resident of your household before moving away to attend school.
So what coverages apply to your student while they are away at college? First and foremost, your child is protected by the Personal Liability section of your homeowner’s policy for bodily injury or property damage they cause as long as they are a full-time student. However, it’s important to note that intentional acts are not covered. Your son or daughter will be facing new responsibilities and exposures, so it’s a great time to consider purchasing an Umbrella policy to provide an extra layer of liability protection for your family.
Taking a Car to College
If your child is taking his or her car to college, it is important that you notify us that the car will be garaged in another location such as the school or an apartment. If your child leaves his or her car at home, you might be eligible for a reduced rate if the student will reside more than 100 miles away from where the car is kept.
Many college kids make a habit of swapping cars to keep the best parking spots. Is it possible that your child could drive someone else’s car? This could be a huge liability for you if the vehicle is furnished and available for regular use. We highly recommend you add the extended coverage (non-owned automobiles furnished or available for regular use) to your auto policy.
This endorsement provides coverage for non-owned vehicles furnished to, or available for use by the individual listed on the form and their resident spouse.
Coverage also extends to a resident relative who does not own an automobile. This coverage is extremely important if your child drives a car provided by his employer, drives a roommate’s car, or borrows someone’s car for several weeks or longer
This offers protection in scenarios such as this: Your child borrows his roommate’s car and causes an accident, seriously injuring the passengers in the other car. The medical bills of those injured exceed the limits on the policy covering the car. Your child, as the driver, could likely be named in a lawsuit. The extended non-owned coverage endorsement would provide coverage for separate or additional liability protection.
**Remember, insurance follows the car and not the driver.
Protecting Everything in the Dorm Room
When it comes to protecting your child’s personal property, coverage is available up to an amount equal to 10% of the personal property coverage limit on the parent’s policy. Personal property includes items such as clothing, small furniture, appliances, and electronics. Of course, the policy deductible would apply in the event of a property loss, such as theft of personal property.
Insuring electronics (such as a laptop or tablet) may be one of the greatest concerns. Some insurance carriers allow these items to be listed separately on the homeowner’s policy so that a deductible would not apply to a loss. However, a small loss filed on a laptop may be looked upon unfavorably by insurance companies, may increase the premium at renewal time, or could even result in coverage being discontinued when combined with other losses.
Our suggestion is to purchase a student property policy from a company such as National Student Services Inc. (NSSI) to cover the student’s computer and other personal belongings. With this company, you can purchase a $5,000 property policy with a $100 deductible for around $100 a year. With this coverage, a property loss will not affect your homeowner’s policy and your child will only have a $100 deductible if his laptop is stolen. The website for NSSI is www.nssi.com.
Living off Campus
If your child is living in an apartment and the lease is in the parent’s or parent/child’s name, then 10% towards contents automatically extends from the homeowner’s policy. If the lease is in the child’s name only, then you need to consider renter’s insurance.
Purchasing a separate renter’s policy in your child’s name is quite affordable and is usually less than $200.00 for the year. Contents limits are available as low as $6,000 and personal liability limits start at $100,000. The premium will vary based on the limits and deductible chosen. Also endorsements to the policy can be purchased such as replacement cost and all-risk coverage.
Sometimes, we receive requests to add an apartment building owner to a renter’s policy. Essentially, this means the landlord is requiring the renter to carry insurance coverage – particularly liability coverage. In these instances, the landlord can be added to the policy as an Additional Interest. This allows the building owner/landlord to be listed on the policy declarations and to be notified in the event that the renters insurance cancels. The Additional Interest endorsement does not provide any coverage to the landlord.
Studying abroad can provide a host of insurance issues. For example, an insurance company can suspend theft insurance at a student’s domestic residence if he/she has been studying abroad for more than 45-90 days (the exact number of days can vary per company.)
In fact, the same holds true if the student has vacated the apartment or dorm for any reason for more than 45-90 days (again depending on the company.) Please inform your insurance agent if you child plans to study abroad so we can be sure the coverage needed is in place.
Health Insurance for Your College Student
Health insurance coverage is complex, at best. Problems can surface without warning, so it’s a good idea to familiarize your child with his/her current coverage and emergency provisions of your policy.
Things to consider include age cutoff, whether your child is a full-time or part-time student, if your plan has a network where your child is going to college, and more. Mistakes in this area can be extremely costly and plans vary widely, so check with your health-plan administrator in advance to minimize surprises.
We do recommend you request an additional health insurance card for your student to keep in his/her wallet. Also if you have a Health Savings Account, request an additional card from the bank so the student can pay for services with your pre-tax contributions.
We also recommend increasing your existing life insurance to cover the total cost of your child’s tuition, room and board, transportation, books, and supplies. Whether you have a college fund prepared for your child or are paying as they go, life insurance is a secure method to safeguard your child’s education.
The Bottom Line
We are here to help answer any of your questions or concerns. If your child is in college, just call us at 864-288-9513 or email us at email@example.com. We’ll be able to counsel you on the best options and give you peace of mind (at least where the insurance is concerned).