Every fall, thousands of children leave the nest to attend college. This conjures up a number of concerns; unfortunately, one thing parents often overlook is what changes can or need to take place with the family insurance plan.
Two types of insurance for college students come to mind, auto and property (or homeowner’s) insurance.
One of the greatest things about college is that everything you need as a student is typically within walking distance of your apartment or dorm. Combine this with the fact that parking is almost impossible to find or astronomically expensive and you see why students often don’t have cars while in school.
If this is true, why are so many parents still paying for their child to be on the car insurance policy? Can’t make the time in your schedule to change the policy? Would it help if I told you that you could save hundreds of dollars per year by removing your student from your policy?
Let’s face it; you probably remember almost fainting when you added your teenager to your policy in the first place, especially if you have a son!
Of course, there are restrictions with regard to removing a student from your policy. Each insurance company is different, so I suggest you call them or talk to your agent before you request their removal.
One restriction covers the distance the student’s school is from your home. Typically, if the school is not more than 100 miles from your residence, the insurance company will force you to leave the student on the policy. The thinking is; if your student is that close to home, they still have access to your vehicles.
Additionally, there are restrictions regarding whether or not the student is full time. Most colleges require a minimum of 12 credit hours per semester to be considered a full time student. If your student does not meet this credit hour threshold, they not be not qualified for removal from your policy. There is another option though.
If your student does not qualify for removal from your policy according to your insurance company’s guidelines, but you are certain they will not drive and you do not want to continue to paying higher insurance rates, you have the ability to exclude them (insurance exclusions). Excluding your student means they are still listed on your policy, but they will not be allowed to drive your vehicles, and the insurance company will deny payment for any claim filed while your student was driving.
Finally, don’t forget to share your child’s grades to your insurance company, assuming they are top notch, as there are discounts associated with that as well (good student discount).
The typical homeowners insurance policy covers a variety of property and casualty risk exposures. For example, the actual structure of your home, the contents inside and any liability you have for injuries to others occurring on your property or resulting from your negligence.
Usually, the contents of your home are covered for 50% of the home value. For example, if your home is valued at $200,000, its contents (your possessions) are covered up to $100,000.
When your child moves into a dorm, your policy should automatically cover their possessions for 10% of what the items in the house are covered for. Using the example above, 10% of your $100,000 “contents” coverage would provide for $10,000 in coverage in the dorm.
Picture the television, microwave, DVD, DVR, computer, mini-fridge, and IKEA furniture. Is $10,000 enough? Grab a sheet of paper, a calculator, and a pen to figure it out. If it’s not, contact your insurer or independent insurance agent and request to endorse your policy (fancy insurance lingo for change your policy) to include higher “off premises” contents coverage as you see fit.
So what if your student lives off campus? You have two options here. Some insurance companies will provide coverage for student’s possessions while living off campus and some will not. Call your insurer or independent agent to determine if this coverage is available to you.
If not, you would need a renters insurance policy. This type of policy provides coverage for your possessions while living in a rented home or apartment. This coverage is often overlooked, but very cheap, so I always recommend it!