Summer is coming to an end, which means that every college student is getting ready to head back to campus. As the first day of classes draws near, parents and children alike will make sure everything is in order for back to school.
In your efforts to prepare for the school year, don’t forget about insurance. While your child may be covered by your health insurance plan, it’s important to consider insurance for your college student’s possessions, apartment or dorm room, and the car he or she takes to school.
Here’s what you need to know about insurance if your college student is…
Living in a dorm
If your child is living in on-campus housing, your homeowners insurance policy will likely extend to his or her belongings at college. There are some limits, though. Contents coverage is usually just 10 percent of the amount that you have for possessions at home. So, if your policy covers $10,000 in losses, only $1,000 worth of your student’s belongings are covered.
Additionally, certain types of items may not be covered by your homeowners insurance policy. Double check the coverage of things like sporting equipment, electronics or designer jewelry. If these items aren’t covered, you might consider investing in a floater policy for those possessions specifically.
Some parents spring for a dorm insurance policy to provide financial assistance should their child’s room get robbed. However, this may not be necessary for all students, Consumers Reports pointed out.
Risk of theft varies depending on the college campus. Parents can check out specific statistics for their own children’s college campuses on the FBI’s website. According to the National Center for Education Statistics, crime on college campus decreased between 2013 and 2014. However, about half of all crime was attributed to burglaries. Per every 10,000 students, there were about 9 burglaries that year.
If the odds of your child’s dorm room being robbed are too high for your comfort, a dorm room insurance policy may be a good solution. Deductibles aren’t too expensive – some as low as $25, according to Consumer Reports. And, if something does happen, you won’t have to file a claim in your homeowners policy.
Living in an apartment
If your child is living on his or her own in a rented apartment unit, your homeowners insurance policy will probably not extend to property kept here. In this case, your child should consider getting a renters insurance policy to cover theft or damage to their own property as well as any accidents that leave the apartment itself damaged or a guest injured. In some cases, maintaining a renters insurance policy may even be required.
Renters insurance policies aren’t as expensive as homeowners insurance policies, The Chicago Tribune pointed out. They typically cost less than $300 per year and provide between $20,000 to $30,000 in contents coverage and $100,000 to $300,000 in liability coverage.
If your child has roommates, it’s important they all have their own renters insurance policies. These plans only cover the name on the insurance policy, so if your child’s roommate has his or her own policy, it won’t cover your kid unless his or her name is included. Roommates can simplify insurance by purchasing a policy together.
Keep in mind that some insurers will extend your homeowners policy to your child living in off-campus housing; double-check by getting in touch with your insurance provider before investing or encouraging your child to invest in a renters insurance policy.
Taking the car to college
If you’re sending your child off with a set of car keys, it’s important to think carefully about auto insurance.
However, if your child’s primary address is still your home and they are a full-time college student, this may not apply. Additionally, this might not be necessary if your child doesn’t have legal ownership of the car – like if the title doesn’t have his or her name on it.
If you decide to take your child off your insurance policy, you’ll likely be rewarded with a lower rate for not having a driver under age 25 on your plan. However, your child will most likely be paying a higher rate than you’re saving for paying for his or her own plan.
If your child gets into an accident, or lends the car to a friend who then gets into an accident, be prepared for higher rates.
If your child is not taking the car to college, you might consider taking him or her off your insurance plan. There are pros and cons to this. You’ll probably get a lower rate, but your child won’t be covered when he or she comes home for summer or winter break and wants to use the car.
You can still realize savings if you keep your child on the policy, though. If campus is more than 100 miles away from your home, inquire about an occasional driver discount, since it’s unlikely your child will be borrowing the car often. Also, if you’ve got a stellar student, ask about a good student discount.
Sending your kid to college is an exciting time, but it’s also important to make sure you and your student have your financial responsibilities in order. To learn more about what you should do before your child heads back to campus, reach out to Bank Midwest.