When college students arrive on campus, their cars are often loaded with pricey laptops, tablets, flat screen TVs and their entire wardrobe. Between the house parties and theft in dorms and libraries, it's likely any one of these items could suffer some damage. So for parents of students who just returned to college, now is a good time to review their property and casualty insurance.
The insurance company Travelers found that in a survey of 1,000 adult consumers, almost half of those who had a child start college during the past five years did not review their insurance coverage at the time.
That could be a costly mistake, especially since theft of student property is an issue on many college campuses. "I know there's so much to think about [when a child leaves for college] but insurance needs to be on that list," says Lori Conarton, a spokeswoman for the Insurance Institute of Michigan. "It's always horrible to find out you're not covered after you have a loss, so make sure you have the insurance that you need."
Here's a look at the questions you should consider when reviewing your homeowners and auto insurance policies.
Homeowners insurance. Students who live in an off-campus apartment will likely need their own renters insurance policy. But if your student lives in a dorm on campus (even while studying abroad), your homeowners or renters insurance policy may cover personal property in the event of a fire, vandalism, theft or other occurrences that otherwise would be covered at home. But a student wouldn't be covered for "typical college-type mishaps, such as accidently spilling coffee on an expensive electronic device," says Loretta Worters, a vice president of the Insurance Information Institute.
In many cases, your homeowners policy will cover only a portion of the full coverage you have at home. For instance, if your policy covers $100,000 of your personal property at home, it may only cover $10,000 of your college student's personal property in a dorm. And certain categories like electronics or jewelry may be capped around $1,000 under your homeowners policy, both at home and in a dorm, so check with your insurer.
If your student has an item worth more than $1,000, the safest option is to leave it at home. For laptops or musical instruments he or she needs at school, consider purchasing an endorsement or personal property floater – which covers property regardless of the insured's location – to provide additional coverage.
Before your student heads to campus, also take an inventory of everything leaving the house. A detailed list of personal property and what each item costs can help in case you need to file an insurance claim.
Auto Insurance. Talk to your auto insurer, ideally before your student leaves for college. If he or she is taking a car to school, the insurer will likely re-evaluate premiums depending on the location and whether the vehicle will have a new registration. If your student leaves a car at home, let your insurer know if anyone else will be driving it or if it will remain in the garage except during school breaks.
Teen drivers present a higher risk, so they're typically more expensive to insure than more experienced drivers. However, many insurers offer a discounts to college students and parents. For instance, if a student does not take a car to campus and attends a school at least 100 miles away, he or she could still be covered under a parent's policy to drive the car at home but qualify for the same discounts as students away at school. Some insurers like Travelers offer a student discount to those who maintain a B or better grade point average. Insuring a student's car with a parent's insurance company could also result in a multi-vehicle discount.
Worters recommends asking how your insurer assigns drivers to cars. Some insurers assign the driver who is most expensive to insure – often a teen or young person – to the car that is most expensive to insure. If your insurer will allow it, assigning your student to the least valuable car could help reduce premiums. "Some insurers will allow policyholders to do this if the number of automobiles equals or exceeds the number of insured drivers on a policy," Worters says. However, that means the student must stick to driving the assigned car, even in an emergency. Accidents involving a young driver and unassigned car could bump up your premiums or trigger penalties.
Also remind your student about the importance of safe driving while away from home and especially about the hazards of texting and driving or drinking and driving. "Explain that a driving infraction or being in an accident can drive up their insurance costs," Worters adds.
[See: 10 Unexpected Costs of Driving.]
It's easy to lose sight of these considerations in the excitement of a new school year, but Elaine Baisden, a vice president of personal insurance for Travelers, says parents should keep them in mind. "It's a milestone for the kids," she says, "but the parents can use it as a milestone for themselves to give themselves an insurance checkup."