You and your college-aged child will have to deal with new financial issues when they go off to college. It can be difficult to ensure that savings, loans grants, scholarships, and other financial aid provide enough funds for your child to live comfortably while still being able to afford school, books, and supplies. You also need to ensure that your child’s financial future and health are protected by the right insurance policies.
These tips will help you determine where to begin when assessing your child’s insurance needs and how to structure them.
- Renters Insurance
Your child will likely need renters insurance, regardless of whether he lives in a dorm room or an apartment on campus. This will protect him against any loss of property or liabilities. Students who live at home are still covered by their parents’ home insurance policies.
Students are not eligible for reimbursement from their dormitories if their property is damaged or stolen in an insurable event, unless the damage or loss was caused by college negligence. This is also true for apartment living off-campus. Renters insurance policies will provide financial compensation for your child’s loss on a replacement or actual basis.
If a guest injures your child’s child’s apartment, the child can be sued for damages and medical payments. The rules for renting a room in a dormitory are different because some colleges have liability coverage for residents students. It’s worth checking with the school where your child is enrolled to see if they do.
- Auto Insurance
Your child must have auto insurance that covers any motorized vehicle he or she will use while at school, including a scooter or motorcycle. The state will require college students to have more insurance, as they have less driving experience and are more likely to be involved in accidents than older drivers.
Your state may allow you keep your child on your policy if your main residence is not your home. You may need to obtain a policy in the name of your child if you are not allowed by the state. There are many ways that auto insurance companies can assess risk and assign rates. The primary address of the driver may also be a factor in these decisions.
- Life Insurance
Although not mandatory, life insurance is an important policy to have for your college-aged child. A life insurance policy will help you to manage all of your child’s finances in the event of their death. A college student can get a life insurance policy that locks in the low rates that are available to young people so that they can continue to pay those rates throughout their lives.
Your child can borrow from the cash value of their policy if they buy a permanent (or whole) policy. This is a great way for your child to get on the right financial path.
- Health Insurance
Health insurance is essential for college students, no matter how old or invincible they may think they are. In some cases, the school may require them to have it. Your child may be exposed to germs, bacteria, and viruses they might not have developed a tolerance to if they live in a shared environment such as a college dorm room or apartment with other students. Students may need more medical attention for common illnesses than in the past. Without insurance, these costs can quickly add up.
Students under 26 years old can continue to be covered by their parents’ plan even if they are not at home. However, depending on the school they attend, they might have difficulty finding caretakers and facilities that will accept them. A policy that covers the college’s area may be better than an individual insurance policy.
It is not a good idea to have insurance at all times. Young adults are just beginning to enjoy freedom and independence. The financial hole that being without insurance can create is a danger for their future. It’s easy to avoid.
