Heading to college probably means your child is leaving home for the first time. So, it’s a massive milestone for both you and your child. With the numerous expenses that college comes with – including tuition, housing, and student loans – there is also another less obvious expense: insurance.
Insurance isn’t the first thing to come to mind when one thinks of college. Understandably, you’ll have a lot of questions, like what insurance a college student needs and how it works if your child is still covered by a family plan. Figuring out how to keep various insurance costs down as your child transitions into adulthood is not easy, but we’re here to help.
Let’s understand the standard insurance requirements for college students.
Renters’ Insurance
Sometimes, college students will have to purchase their own renters’ insurance policy, but they are likely already covered under their parents’ renters’ insurance. It comes down to where your child calls home during the academic year.
As a parent, you need to check your homeowners’ insurance policy to know what it covers. Certain policies cover personal items that are destroyed or stolen from the primary residence, but there could be limitations based on age and whether your child is living in an off-campus home or dorm. Moreover, the limits will be far lower than the main policy limitations, so ensure that there is enough coverage.
Your child may need renters’ insurance if they live in an off-campus house or apartment. It’s often a requirement under the lease agreement, but luckily for students, renters’ insurance is affordable as it covers property coverage, liability coverage, and additional living expenses if the house is unlivable.
Car Insurance
College students can get car insurance coverage through their parents or a different policy. If your child lives at home or nearby and drives the family car, the car insurance company might require your child to stay on the family policy. Be sure to discuss the requirements of the parent’s car insurance policy with the insurance company or broker.
It should be noted that college students typically have higher car insurance rates because young drivers are considered more risky. Students with a driving record that includes at-fault crashes and moving violations can be expected to pay more, so keeping a driver with higher rates on the family policy could make everyone pay more.
- If you are hunting for car insurance policies for a college student, here are some quick tips:
- Look for discounts. College students with good grades are eligible for student discounts.
- Get usage-based car insurance programs that determine the rates according to how much the policyholder drives and whether they have safe driving habits. These programs can offer affordable car insurance for college students who are safe drivers and don’t drive often.
- States stipulate a minimum requirement for the limit of liability, so check your limits. If the losses are above the liability limits, your assets could be seized to compensate, so it would be wise to consider raising your limits.
- Besides the car insurance coverage necessary under state law, additional coverage could be required. Some recommended insurance policies include uninsured and underinsured motorist coverage, as well as collision and comprehensive coverage for financed cars. Based on your budget and preferences, you can determine if additional coverage types are required.
Student Health Insurance Plans
Even if your child is in excellent health, going to college without health insurance can be very risky. A sudden medical emergency – such as a broken arm or a ruptured appendix – can be financially taxing if your child is not covered under a health insurance plan. Plus, navigating a medical emergency alone can be scary, especially if they don’t have insurance.
Luckily, there are many options for student health insurance plans.
- Your child can stay under the parent’s health plan. Under the Affordable Care Act, any dependents under 26 can remain on their parent’s health plan. This means that college students don’t need to worry about health coverage. College students who study out of the state may not have access to in-network care through their parents’ policies. So, if your child is moving to another state for college, you must determine if your plan’s network will cover it.
- Some colleges offer student health plans. The coverage will vary; while some offer comprehensive coverage, others might be limited. Therefore, review the coverage terms carefully and determine if it has enough coverage in case of a severe injury or illness.
- If your child is over 26 years old or studying out of state, you must purchase a health plan through the health insurance marketplace.
- If any of the options mentioned above are not applicable, you must consider private health plans outside the health insurance marketplace. It would be best to work with an insurance broker to determine the best plan for your needs.
Other Insurance Policies
While the only insurance coverage college students would require includes renters’, car, and health insurance, some college students also look for additional policies.
For instance, if your child uses a motorcycle, they will need motorcycle insurance. Likewise, students who start a family while in college might also want to purchase life insurance.
Dental insurance is another popular and valuable coverage many college students consider. Your child may be covered under the policy if you have a dental insurance plan. If not, buying a separate dental plan would be a good option.
Bottom Line
Your child may be nervous and excited about entering college, most likely consumed with thoughts about how they will get along with their roommate, how they will fit into college, and how to manage their workload. Insurance might not necessarily be on their minds. Therefore, as parents, you must be more aware of the logistical side of things to ensure that their time away is spent safely and securely.
Feel free to talk to your family, friends, and coworkers whose children have gone off to college before. They can give their insights and advice based on their own experiences. Listening to their perspectives and how they maximized savings can be reassuring for you and your child as they step foot into a brand new chapter of their lives.
