College Students and Insurance
It’s an exciting and emotional time when a child – err, young adult – heads off to college. And, for many parents, a confusing time in regards to car insurance coverage and personal property coverage.
Should college students remain on the family’s auto policy? Do they have coverage for their belongings in the dorms? Let’s take a look at these and other issues to help clear up some of the confusion.
Wheels or No Wheels?
If you’re supporting your college student financially, you can still consider her a household member for insurance purposes. Yes, even if she doesn’t live at home or moves out of state, and even if she is older than 18. This means that:
- If she takes a car to school, she can stay on your auto insurance policy. Be sure to tell her that lending the car to friends is out of the question!
- If she leaves the car at home, there’s likely no need for her to be listed as a daily driver on your policy. This could reduce your car insurance rates, especially if the school is more than 100 miles away from home.
- If she returns home for a weekend or holiday, she can still drive under your coverage. However, if she will be using the car for an extended period, such as during summer break, you should let your independent agent know.
Oftentimes carriers offer a Good Student Discount for students who maintain a high GPA, such as 3.0 or above. If your college student is remaining on your auto policy, be sure to talk to your independent agent about whether this is available for you.
Also be aware that, if your student owns her own wheels or you transfer ownership of a vehicle into her name, she will need to register and insure the vehicle herself. This is a great way to start building her insurance history!
What’s It All Worth?
Car or no car, your student is no doubt taking several thousand dollars’ worth of personal belongings with him to college: laptop, tablet, TV, smartphone, gaming equipment, books, wardrobe, luggage, etc. Some lines of study may even require costly gear, such as musical instruments or cameras. Your existing homeowners policy should extend some personal property coverage to your student.
For example, 10 or 20 percent of your personal property coverage may extend to your student’s dorm stay. So, if you have $100,000 of personal property coverage on your policy, your student has $10,000 or $20,000 worth of coverage. This may even follow your student to a foreign country if he’s studying abroad for a semester or longer, but be sure to check with your independent agent.
To make it easy to take advantage of this coverage in the event of a covered incident, be sure to:
- Create an inventory of what your student is taking before he heads off to college and what it’s all worth. Include receipts, photos, serial numbers and as much other information about the items as you can.
- Itemize any items worth more than $1,000 since, in most cases, there is a cap on how much coverage particular items or types of items receive under your policy. Itemizing the valuables offers broader coverage and also broadens the coverage territory to anywhere in the world.
For students renting a house or apartment off-campus, or even a dorm on-campus, a renters insurance policy in their own name is another option. Renters policies are oftentimes highly affordable ($10 to $20 a month in some cases) and provide liability and medical payment coverages in addition to personal property.
What About Umbrella Insurance?
An umbrella policy covers all household members. If you have one, it gives your student even more liability protection in auto accidents and other mishaps, according to your policy.
It’s normal to be nervous when your kids head off to college. But, there’s no reason to be nervous about whether you’ve handled their insurance needs properly. Use this primer as a guide but remember that your own insurance coverage may differ, depending on your policy, your carrier and your state.
To further put your mind at ease, check in with your independent insurance agent for regular guidance. Trust me, there is no such thing as too many questions when it comes to keeping your young adult safely insured!