How to Insure Your College Student

As students embark on the academic year, here's how to make sure they have the coverage they need at the best possible price.

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 2017 was over $32,000, according to the Federal Reserve Board. The last thing a student, or their parents, needs is to add to that burden with losses from serious illness, a car wreck or stolen property.

It’s not smart to assume your student will be covered by existing policies, especially if they’re leaving home. Read through this rundown to find out what you need, and where you can save money.

1. Car insurance

If your student leaves their car to gather dust at home while they’re at college, and campus is at least 100 miles away, they might qualify for a “distant student” discount. Call your auto insurance company and ask. And if so, also make 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 sizes of these discounts vary by insurer and state, but a good-student discount, usually for a B average or better, is worth 10 percent to 15 percent, according to CarInsurance.com.

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, and 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, buying one of these top-rated cars for young drivers can help 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 be covered by your health plan until age 26, regardless of where they live, if they’re married, and whether they are financially dependent on you, thanks to changes from the Patient Protection and Affordable Care Act (aka 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 means better coverage. Both yearly limits and lifetime limits on a student’s coverage for “essential health benefits” have been eliminated under the ACA, according to the American College Health Association. (The FAQ on the association’s site includes a list of these benefits.) In addition to wellness and preventive services, this includes emergency care, hospitalization, mental health and substance-abuse help and prescription medicines. Also, insurance must pay to treat pre-existing conditions and not charge extra for them.

Finally, vaccinations are often a requirement for college admission. If your student is younger than 18, save the cost of a doctor’s visit by getting the shot at your county health department, where student vaccinations usually are given for free or at little cost.

3. Property insurance

Students these days have a lot of valuables: laptops, smartphones, iPads, bicycles, flat-screen TVs and gaming consoles to name just a few. And college campuses aren’t immune to fire, burglary and other tribulations.

If your student is living in a dorm, your homeowner’s policy likely covers their stuff, but you should check and also ask about policy limits. Living off-campus in an apartment? That may call for renters insurance — which runs about $15 to $30 a month, depending on location and the renter’s possessions. Be sure to shop around for the best price and, if it still seems too expensive, lower the monthly cost by raising the deductible.

Call your company and ask if you can get a discounted rate for having multiple policies.

Finally, with help from your student, make an inventory of everything they own by photographing it or making a video so you’ll have a record in case they need to make a claim for losses.

4. Tuition insurance?

If your student can’t finish a semester because of illness or injury, you could be out a lot of money.

The average cost of published in‐state tuition and fees in the public four‐year sector was $9,650 in 2016-17 — and average total cost including room and board was over $20,000. At private four-year colleges, average total charges were more than $45,000 a year, according to The College Board.

Tuition insurance is designed to reimburse those expenses in case of an unexpected absence. It costs about $200 to $600 a year, according to Consumer Reports, which estimates the average total cost of college tuition, fees, and room and board at a four-year school at $41,000 this year.

Is it a good idea? Consumer Reports points out that coverage usually only kicks in if withdrawal from school was caused by a serious health issue. Otherwise, a policy probably wouldn’t pay. And, as with many specialty insurance policies, these are often short on coverage and long on exclusions. Deductibles can be high, too.

“Depending on when you withdraw, the school’s own refund policy may already give you a significant chunk of change,” Consumer Reports says.

Whether these policies are worth it depends on the fine print, the college’s refund policy, the tuition cost that is on the line, and your aversion to risk.

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.

Do you have tips for insuring the college-bound? Share them in the comments below or on our Facebook page.

Marilyn Lewis contributed to this post.

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