4 Tips to Insure Your College Student – and Save

Photo (cc) by CollegeDegrees360

Between admissions, financial aid, back-to-school shopping, and moving in, it’s easy for families of the college-bound to overlook something critical: insurance.

The average student loan debt in 2011 was $23,300, according to the Federal Reserve Bank of New York. The last thing a student – and their parents – need is to add to that burden with losses from serious illness, a car wreck, or stolen property.

Especially if your student is leaving home, it’s not smart to assume they’ll be covered by existing policies. In the video below, Money Talks News founder Stacy Johnson breaks out the cheat sheet for College Insurance 101. Check it out, and then read on for more…

1. Car insurance

If your student leaves their car to gather dust at home while they’re away at college, and campus is at least 100 miles away, they might qualify for a “distant student” discount. Call your company and ask, as well as making sure your student will remain covered as an occasional driver on trips home.

There might also be a separate discount for good grades. The rules and size of these discounts vary by insurer and state, but AutoInsurance.org says they could be worth 15 to 35 percent.

There could also be cost implications for cars on campus. For example, attending college in a state that requires higher coverage levels can raise premiums – so can moving a car from a rural to an urban setting.

In short, when it comes to cars and college, you need to check with your insurer. If you’re shopping for a car to take, a top-rated used vehicle for college students might keep the rate down. And there are lots of ways to save on car insurance that have nothing to do with college.

2. Health insurance

A full-time student may now be covered by her parent’s health plan until age 26, “regardless of where she lives, if she’s married, and whether or not she is financially dependent on you,” thanks to changes from the Patient Protection and Affordable Care Act: so-called “Obamacare.”

But if you’re confined to a group or network plan, your student will still have to find a participating doctor near campus.

If you choose a separate college health plan, Obamacare now means better coverage. According to WebMD, for the 2012-2013 school year, annual limits have been raised to at least $100,000: previously they were as low as $1,500. By 2014-2015, annual limits will be eliminated. And birth control as well as preventive care (screenings, vaccinations, and check-ups) are now covered.

Additionally, starting in 2013, WebMD says college plans must spend 70 percent of premiums on care instead of administrative overhead or profits. (It can be as little as half that now.) An insurer not meeting this requirement will have to refund the difference.

Finally, vaccinations are often a college admissions requirement. Don’t fork out $200 for a doctor’s visit when your local health department will stick your student for as little as $5 per shot.

3. Property insurance

Students these days have a lot of valuable electronics: laptops, iPads, Blu-Ray players, flat-screen TVs, gaming consoles. And college campuses aren’t immune to fires, burglary, and other tribulations.

If your student is dorm-bound, your homeowner’s policy likely covers their stuff, but you should check, as well as finding out policy limits. Living off-campus in an apartment? That may call for renter’s insurance. The good news: It’s pretty affordable, as little as $12 a month for $30,000 of property coverage and $100,000 of liability coverage.

So call your company and ask if you’re covered, and if not, whether you can get a discounted rate for having multiple policies. And then make sure you and your student take an inventory and photograph everything – because you can’t claim anything you forget about.

4. Tuition insurance?

If your student can’t finish a semester due to illness or injury, you’re possibly out the cost of tuition and housing, a princely sum if the college in question is expensive. Tuition insurance is designed to reimburse those expenses. It’s not terribly expensive: According to the Wall Street Journal, the cost to cover the $41,000 tuition and fees at USC is only about $123.

But as with many forms of specialty insurance policies, these are often short on coverage and long on exclusions. For example, preexisting conditions, mental health issues and self-inflicted injuries are often limited or excluded. In addition, since most colleges offer pro-rated refunds for the first month of each semester and students unable to complete classes near the end of a semester will likely take an incomplete rather than leave school, these policies are really only covering the middle part of a term.

Whether these policies are worth it or not depends on the cost, the hardship that could arise and your aversion to risk. But according to the Journal article referenced above, they’re not very popular.

Bottom line? Insurance is as important on campus as it is everywhere else. Rather than looking at it as a hassle, consider it a learning opportunity. While that student is waiting to hit the books, have them hit the phone and web and check out this stuff themselves. It’s a life lesson that will come in handy before, during, and after college.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
This Is the Best Online Savings Account for 2021
This Is the Best Online Savings Account for 2021

The rate of return is just one of several reasons this account stands out.

7 Surprising Advantages of Downsizing as a Retiree
7 Surprising Advantages of Downsizing as a Retiree

Downsizing your home offers many benefits, including some you may not have anticipated.

11 Secret Uses for Everyday Items That Save Money
11 Secret Uses for Everyday Items That Save Money

These are simple solutions for life’s irritations.

17 Amazon Finds Under $20 That Will Organize Your Life
17 Amazon Finds Under $20 That Will Organize Your Life

We’ve rounded up must-have products to help you get your ducks in a row.

10 Things That Really Are Free on Amazon
10 Things That Really Are Free on Amazon

These freebies are available to anyone — no Prime membership necessary.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
10 Things Frugal People Never Buy
10 Things Frugal People Never Buy

If you’re a true tightwad, the mere thought of spending money on these items gives you the willies.

10 Useless Purchases You Need to Stop Making
10 Useless Purchases You Need to Stop Making

You might as well flush your money down the loo if you spend it on these things.

The 16 Cars Most Likely to Last 200,000 Miles
The 16 Cars Most Likely to Last 200,000 Miles

One automaker takes half the spots on a list of the longest-lasting vehicles.

7 Social Security Rules Everyone Should Know by Now
7 Social Security Rules Everyone Should Know by Now

Confusion over Social Security is a shame, considering how many of us will need this money badly.

9 Shopping Mistakes to Avoid at Costco
9 Shopping Mistakes to Avoid at Costco

Are you missing out on serious savings at your favorite warehouse club?

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

They don’t make coffee makers like this anymore.

11 Products Now in Short Supply Due to the Pandemic
11 Products Now in Short Supply Due to the Pandemic

Many goods we take for granted have become tough to find in 2021.

7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

14 Things You Should Stop Buying in 2021
14 Things You Should Stop Buying in 2021

These convenient household products come with hidden costs that you might not have considered.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

Is Writing a Check Still Safe?
Is Writing a Check Still Safe?

Every time you pay by check, you hand your bank account numbers to a stranger.

6 Ways to Protect Your Retirement Accounts From Hackers
6 Ways to Protect Your Retirement Accounts From Hackers

Imagine having $245,000 stolen from your retirement account — and not being reimbursed.

8 Things You Should Replace to Improve Your Life Today
8 Things You Should Replace to Improve Your Life Today

Being frugal isn’t smart if you put off replacing these items.

This Is the Most Dependable Car Brand in the U.S.
This Is the Most Dependable Car Brand in the U.S.

This brand’s vehicles are least likely to give drivers repair headaches, according to J.D. Power.

13 Amazon Purchases We Are Loving Right Now
13 Amazon Purchases We Are Loving Right Now

These practical products make everyday life a little easier.

7 Hidden Sections of Amazon Every Shopper Should Know
7 Hidden Sections of Amazon Every Shopper Should Know

These little-known departments of Amazon are gold mines for deal-seekers and impulse shoppers alike.

7 Income Tax Breaks That Retirees Often Overlook
7 Income Tax Breaks That Retirees Often Overlook

Did you realize all these tax credits and deductions exist — or that they apply to retirees?

7 Social Security Benefits You May Be Overlooking
7 Social Security Benefits You May Be Overlooking

There’s more to Social Security than retirement benefits.

The 6 Best Investing Apps for Beginners
The 6 Best Investing Apps for Beginners

If you’re looking to ease into investing in the coronavirus economy with just a little money, check out these easy-to-use tools.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.