Local Finance

Keeping Kids Covered When They Head Off to College

Heading off to college is a big step for any recent high school graduate. There is a sudden sense of freedom and independence, as well as the sudden reality of being more self-responsible. However, not surprisingly, most students maintain a financial link to their parents. And, one of the biggest financial commitments a parent will have with their college student is to understand which insurances they need to carry when their son or daughter is away at college.

The key types of coverage to consider are health care, auto and property insurance.

Health insurance
If your child is covered under your employer's plan or some other form of personal coverage, you should have the option to continue that coverage during their college years and even beyond. Under provisions of the health care reform law passed in 2010, parents can keep children on their plan up to age 26 (if certain qualifications are met). The vast majority of students have access to this kind of coverage, and it may be the best option available.

There is a potential downside for students who move far from home. The plan that covers parents in one state may not offer access to many providers (doctors, hospitals, etc.) out of state. If that's the case, the child may want to pursue other insurance options. Universities may offer a plan, or a private insurance plan could be considered.

Auto insurance
Parents might be tempted to drop students from their policy if they attend college far from home and don't take cars with them to school. That can be a mistake. Coverage can be adjusted in this case, but if the students might drive a car while at school (which can easily happen) and if they are going to drive while back home during vacations, coverage should continue. Most companies may trim insurance rates to reflect the fact that a child generally will not be driving. Be sure to apply for a good student discount if the child maintains a "B" average or better.

One reason to keep students covered is that when the time comes for them to get their own auto policy, they may be rated more favorably by insurance companies if they've consistently had auto insurance.

Property Insurance
Students will no longer be under your roof, so the question is whether you can provide coverage for their personal items in a dormitory or off-campus housing.

Homeowner's coverage can often extend to personal possessions off premises, such as what may be in your son's or daughter's dorm room. It may even pay for a laptop computer or cell phone stolen elsewhere on campus, for example. Coverage may be different if the student is studying overseas. Check with your insurer to see what is provided under your existing policy.

In many cases, a child living off-campus who has a one-year lease for an apartment or room in a house may not be covered under your policy. Renter's insurance should be explored in these circumstances. It can be inexpensive and even provide coverage if the rental space is damaged and the student has to live elsewhere temporarily.

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