The Parents’ Guide to Insurance for College Students

When your children take their wobbly first steps or ride a bike for the first time without training wheels, there’s a nervousness and excitement you feel as a parent. You feel the same when they go to their first dance, have their first date and drive off alone in a car. Then one day, you get those same feelings when they go off to college, one of the last big milestones on the road to their full independence.

College is often the first time your children will be out living on their own and it’s a big deal. However, they won’t be completely on their own. When it comes to finances, many parents offer their college students support, which is gradually weaned over time.

One common type of support is keeping your children as dependents on your various insurance policies. To do this,  you will need to get in touch with your insurers. Your rates can change and you may need to check on technicalities to ensure they have the coverage you need. To help parents navigate homeowners, renters, auto, life and health insurance for their college students, here’s a helpful guide.

Homeowners and renters insurance

While packing up in preparation for your child’s departure, you may notice he or she has belongings of high value. It’s not uncommon for college students to have furniture, appliances and an array of electronics. You may feel worried, wondering if the belongings will be safe in a college dorm or an off-campus apartment. According to the National Center for Education Statistics, of the various crimes reported on college campuses in 2013, 56% were burglaries. What happens if your son or daughter gets burglarized?

This is where a homeowners or renters insurance policy can come in handy. Many homeowners policies will cover personal property, including your child’s belongings while he or she is away at college. Geico, for one, covers appliances, furniture, clothing and even dishes. More expensive items such as jewelry may need additional coverage.

You’ll want to look at what kinds of property an insurer covers, what documentation it requires to cover the property and what coverage limits are in place. More specifically, look at the limits for the personal property of your dependent family members who do not live with you. There may be caps significantly lower than the limit for your own personal property at home.

If your current policy won’t cover the full value of your college student’s belongings, you may want to consider a separate renters insurance policy plan. According to Geico, renters insurance can prevent a situation in which students are underinsured or not covered by a homeowners policy because of where they live (i.e. off-campus).

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Car insurance

Next up is car insurance. Will your college student will be eligible to stay on your policy? According to the Department of Motor Vehicles (DMV), he or she can under the following circumstances:

  • If the title of the vehicle is in your name
  • If the student lives with you
  • If he or she is a full-time college student and his or her primary address is your residence

There may be other stipulations depending on the state you live in and your insurance company, so be sure to contact your agent to find out.

If your college student can stay on your policy, you’ll need to let your insurance company know whether he or she is going to take a vehicle to school.  It’s important to note that if he or she plans to, your rates may go up or down depending on where the school is and whether it’s rural, urban, etc. If your child leaves the car home, your rates probably will be cheaper as the risk is lower (see discounts below).

Will students need to remain on insurance if they don’t take the car? Keeping them on the policy is still recommended by the DMV, so they are covered as a passenger/pedestrian and as a driver of a friend’s car or your car when visiting home.

Lastly, ask your insurer about the following discounts, which are typically offered by auto insurance providers.

  • The good student discount: A discount if your college student gets good grades. Check with your insurer to see whether a discount is available and find out what grades are required to qualify.
  • The resident student discount: This is a discount on insurance when students go to a college that is more than 100 miles from their parents’ home and they do not take their car.
  • The occasional driver discount: This is another option for saving on insurance if students leave their cars behind when they go to school. They can be categorized as an occasional driver, which is less expensive to insure because of the reduced risk.

You may want to shop around to find out which auto insurance company offers the best deal for your new situation.

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Life insurance

What does life insurance have to do with your college student?

If you have committed to paying for your child’s college education, a life insurance policy can help to ensure your child’s college costs will still be covered if something happens to you. In fact, according to Statista‘s 2016 survey on owning life insurance, 15% of respondents said they bought life insurance to provide funds for a college education.

You can assign your spouse or child as the beneficiary who receives the death benefit in the unfortunate event that you pass away. Then, they can use that money to pay off any remaining college expenses. A term policy can suit this situation well, as it is temporary coverage for a set number of years at an affordable price. However, whole insurance may be right for you if you want permanent life insurance coverage along with an investment plan.

Health insurance

According to Healthcare.gov, the Affordable Care Act allows your children to stay on your health insurance plan until they are 26 years old. This is not affected by getting married, having children, starting or leaving school, living away from home, being tax independent or turning down an offer of job-based coverage. However, if they are going to a college outside your home state, and you don’t have a multi-state plan, there may be issues with non-emergency health care coverage.

If that’s the case, Healthcare.gov recommends reviewing the provider network near the school carefully and understanding how the plan covers care in the new state. The other option it recommends is having your student individually apply in the state where he or she goes to school.

Learn more about healthcare plan options

Help your college student transition successfully

As parents, we all want our children to take on new challenges and be successful. To help your child make the transition into college life, while still having a safety net provided by your insurance policies, be sure to audit your current plans. Let your insurance providers know about the change and use these tips to help ensure you have the best coverage for this new season of life.

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