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While college students may think of themselves as indestructible, the fact is they face many of the same health, property and liability risks as adults. Before your child or grandchild heads for college, do a quick insurance check.
Health: Most students who have been covered by their parents’ policy can continue that coverage, usually until age 26, as long as they remain a full-time student. A parent’s coverage through an employer usually provides the most benefits for the lowest cost however, for a variety of reasons keeping a student on a parent’s policy may not be in-line with your financial values or situation and I am not suggesting it is healthy to keep a child dependent until age 26. If keeping an adult child on a parent’s health insurance policy isn’t an option, look into coverage from the college itself, the student’s employer or a short-term policy to cover the gap between full-time student and full-time employee.
Renters: A university or landlord has insurance on its buildings. The coverage for those buildings does not extend to the occupants’ personal property, which today can include higher ticket items like computers, stereos, televisions and other electronics. Renters insurance, which typically costs $15 to $30 a month, replaces lost, stolen or damaged items with the same type and value, so keeping receipts off-site (like at Mom and Dad’s house) can help the claims process. Coverage goes with the policyholder, making it perfect for college students, who tend to change housing frequently. The liability portion of a renter’s policy also covers damages a student unintentionally causes to the property.
Auto: Again, riding on Mom and Dad’s policy usually presents the cheapest option. If going it alone, students may qualify for discounts by maintaining good driving records, getting good grades and having their renters and auto policies with the same company. Consider insurance costs before buying a car for college – sporty models tend to require higher premiums. Going without coverage isn’t an option. Most states require at least liability auto insurance, and having an uninsured accident can ruin the driver’s credit rating.
Just as insurance is an important part of your personal financial planning and risk management, it should be on the checklist for your pre-college child or grandchild. If you or your loved ones have questions about financial strategies to help reduce the impact of unexpected property loss or damage, please feel free to call our office.
Karen helps attorneys; mediators, individuals and couples, navigate through the financial morass of divorce and widowhood. Her expertise lies in understanding the special tax and financial issues that can plague divorce and she helps clients get their financial fair share and equitable settlements. She provides financial analysis, projections and solutions so clients can avoid long-term regret over decisions made early on in divorce and widowhood. Karen offers a range of financial, investment and insurance services that address clients’ complete financial picture and long-term needs before, during and after marriage. She is currently writing a book entitled, “To Have and To Hold Onto Your Financial Fair Share: Financial Decision Making When Marriage Ends in Divorce or Death.”