When your college-age child goes away to school, you both must deal with an entirely new set of financial concerns. It isn't easy to make sure savings, loans, grants and scholarships provide your child with enough money to live comfortably and still afford classes, books and school supplies. And on top of that, you also need to make sure that your child's health and financial future are protected with the right kind of insurance policies.
If you aren't sure where to start in evaluating your child's need for insurance or how to structure their policies, take a look at these tips.
Renters Insurance
Whether your child is going to live in a dorm or in an apartment off-campus, there's a good chance he will need renters insurance to protect him from loss of property or liabilities-or both. Students who live at home still enjoy coverage under their parent's home insurance policy.
Dorms do not reimburse students if their property is stolen or damaged in an insurable incident unless the loss or damage was somehow due to college negligence. The same is true for off-campus apartment living. A renters insurance policy will offer your child financial reimbursement for the loss either on an actual or replacement value basis.
For liabilities, if a guest is injured in your child's apartment, your child could be sued for medical payments and other damages unless she has a renters insurance policy to cover liabilities. Dorms are slightly different as some colleges cover liabilities for resident students, so it's a good idea to check with your child's school to find out whether they are one of the schools that does.
Auto Insurance
If your child is going to drive any motorized vehicle while away at school (including a scooter or motorcycle), then he or she needs to have auto insurance with coverage levels at least at state mandated minimums. In a best case scenario, since college students have less driving experience and more risk than older drivers, they will have more insurance than the state requires.
If your child's main residence is your home then your state may allow you to keep him or her on your policy. If not, you may be required to get a policy in your child's name. Auto insurance companies have many ways of evaluating risk and assigning rates, and the primary address of the driver can contribute to these determinations.
Life Insurance
While not required, life insurance is an important coverage to have for your college-age child. In the unfortunate event of death, a life insurance policy can help you get all your child's financial affairs in order without creating more struggles within your own financial situation. But beyond that, getting a life insurance policy for a college student allows you to lock in the low-rates afforded to the young so that your child can continue paying those rates for life-or at least as long as the term of the policy.
Additionally, if you buy a whole (or permanent) policy, your child's policy will accrue cash values that they can take loans out of in the future. It's really a great way to help your child get started on the right financial foot.
Health Insurance
No matter how young and invincible a college student thinks he is, health insurance coverage is one of the most important forms of insurance for them to carry and in some cases, one that the school will require. Living in a communal environment like a college dorm or apartment with roommates, exposes your child to many different germs, bacteria and viruses that they may not have built up a tolerance to. The student may end up needing more medical care for common illnesses than they have in the past, and without insurance these expenses can really add up.
College students under age 26 can remain on their parent's plan even when they don't live at home, but depending on where they go to school, they may have trouble finding caregivers and facilities that are in-network. An individual insurance policy with an insurer that has providers in the area of the college may be a better choice.
There is never a good time to be without adequate insurance coverage. But as a young adult just getting a taste of freedom and independence, the financial hole that being uninsured can dig sets a dangerous precedent for their future, and one that is easily avoided.