Saying the last goodbye in the dorm parking lot, the stark realization dawns that you can’t protect your child from every risk. It’s time to let go.
But back at home, you can assemble a strong financial safety net. Knowing what your current insurance will pay for — and whether you need to buy extra coverage — is a good first step.
Here’s how to evaluate your auto, homeowners, life and health insurance needs as your kid heads to college.
If your child leaves the car at home
- Ask your insurer about an away-at-school discount. Some insurance companies offer a price break if the college is at least 100 miles away from home.
- Keep the student listed on your policy, so your son or daughter has coverage at home on breaks. Maintaining continuous auto liability insurance also keeps rates down over the long haul.
» COMPARE: Car insurance quotes
If your child asks to take a car
- Consider the risks. University campuses are often easy to get around on foot or bike, and young people are more likely to cause wrecks, so it might make more sense to leave the vehicle behind.
- Notify the insurance company if your child takes a car. Some insurers might reprice the policy based on the school’s location. The coverage price might go up or down.
Car or no car, don’t forget about the good-student discount. Many insurers offer one for maintaining at least a B average.
Homeowners or renters insurance
For a dorm
Your child’s stuff will be covered under your renters or homeowners insurance in a campus dorm. Check the policy for details. Some policies limit coverage for belongings away from home to a percentage of the total amount of coverage for all possessions. Typically there are also coverage limits on expensive items such as computers. Consider buying extra coverage for these items if necessary.
For an off-campus apartment
Your homeowners or renters insurance may extend to your child’s off-campus apartment, but coverage limits are likely to be lower — check with your agent to be sure. In many cases, however, students who live in off-campus apartments need their own renters insurance policies. Renters insurance covers belongings and, like homeowners insurance, provides liability coverage. Liability insurance pays legal expenses if anyone covered on the policy inadvertently injures someone else or damages property and is held responsible. It doesn’t cover illegal acts.
Make sure the liability insurance includes personal injury coverage. If it doesn’t, the price to add it is small. Among other things, personal injury coverage would pay for legal defense and settlement costs if your son or daughter were sued for posting something objectionable on social media.
» MORE: Find the best renters insurance
Shop for a term life insurance policy if you don’t have enough coverage and your income is crucial for paying the college bills. Buy enough to cover you at least until the youngest child graduates from college.
Check whether your health plan’s provider network includes doctors and hospitals where your child will attend school. You’ll pay a larger portion of the medical bills for treatment outside the network with a preferred provider organization, or PPO. With a health maintenance organization, or HMO, there may be no coverage outside the network, except in emergencies.
If your student will be uninsured or will move outside the health plan’s network, check the following:
The college’s student health plan
Many student health plans offer good coverage, but they do vary. Make sure you understand any coverage limits.
The government-sponsored health insurance marketplace
If the college town is outside your plan’s provider network, your child will be eligible to sign up for a health plan outside the regular open enrollment period. Start shopping before the move. The coverage will go into effect:
- The first day of the next month if the plan is selected between the first and 15th of the month.
- The first day of the second month if the plan is picked between the 16th and the last day of the month.
Health insurance plans offered outside the marketplace
Consider this only if you’re not eligible for income-based subsidies that would lower the price through the marketplace.
Find health insurance confusing? You’re not alone. Contact your health plan or health benefits administrator at work. For help finding a marketplace plan, log on to Healthcare.gov to get contact information for free, in-person assistance.
More changes are ahead as your college student gains independence. Review your insurance policies annually to make sure the right coverage is in place.