Cover your new college student with proper insurance
WASHINGTON (7/31/12)--Parents of new college students are likely having a whirlwind summer. Between shopping for dorm furniture and attending new-student orientation weekends, it's a challenge to prepare for the big move-in day.
Don't wait until you're waving goodbye to your new freshman to consider whether he or she will be financially protected at school. Cover your bases now by evaluating your insurance plans and ensuring that your child has the right coverage for life at college (Kiplinger Magazine August).
Assess your student's options for:
Homeowners insurance. If your student will live in a dorm, your policy will likely cover his or her possessions there. Be aware that your insurer may cap college coverage at 10% of the possessions limit on your policy. Look into renters insurance if your student will be living in an off-campus apartment--these policies are often inexpensive.
Auto insurance. Students attending college more than 100 miles away from home without a car can mean big savings for parents. Insurers likely will reduce your premium, but you still can preserve coverage for when they are home for breaks. If your student takes a car to campus, your premium could change depending on the school's location.
If your child attends college out of state, this option can be tricky for parents with a regional plan and small physicians' network. Contact your insurance company before your student heads off to school to find out which benefits will be available on campus. If the coverage won't be sufficient, look into individual health plans through national providers or a high-deductible policy combined with a health savings account.
Health insurance. Skip the school's student health plan if possible--these plans often charge high fees and offer limited care options. Most insurance plans provide coverage for children until they turn 26, so your son or daughter can remain on your policy.
For more information, read "What Do You Mean That's Not Covered? FAQs About Homeowners Insurance" and "Review Insurance to Ensure Proper Coverage" in the Home & Family Finance Resource Center.
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