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A Crash Course in Insurance and the College Student
Your child is going off to college, and you have paid the tuition, bought extra-long sheets and loaded the laptop with virus protection. But there is still one issue that you need to address: insurance.
First, consider car insurance. If your child goes to college more than 100 miles from home and does not take a car, you will receive a premium credit on your insurance.
On the other hand, if your child does take a car to school, remind him or her that the auto insurance follows the car. That means that if your student lets someone else drive the car and that person gets into an accident, it is your insurance that will respond to the claim. So strongly discourage your child from letting friends or roommates borrow the car.
If your student moves into an apartment, you can buy renter’s insurance to cover his or her belongings. We don’t usually suggest doing that, however, unless the student has an extraordinary amount of personal property or the landlord requires renter’s insurance.
Instead, we suggest a simple and inexpensive solution. Add your student’s residence to your homeowner’s policy via a liability extension endorsement. Extending the liability from your policy costs around $50 per year, and adding your child’s location to your umbrella coverage would add another $50 to $100 per year, depending on the limits of your policy.
Most home insurers – including all of the companies we represent – also will extend 10 percent of your contents coverage to your child’s location at no additional cost. For example, let's say a client has a home insured for $900,000. The homeowner’s policy will automatically include at least $450,000 (50 percent of the value of the home) coverage for contents in the home. By extension, 10 percent of this limit ($45,000) can be applied to the child’s apartment or dorm at no additional charge. This is usually more than enough coverage for the clothes, furniture and computer gear brought to school by the average student.
The only downside is that the deductible on your homeowner’s policy also would apply to the contents of the child’s apartment. If you have a high deductible, then, this approach would only apply to a large loss.
We would be happy to talk with you about insurance issues related to college, or about any insurance concerns you have. Please contact me, or any member of The Bensman Group team, at 847-572-0800 or firstname.lastname@example.org.