The adorable four-year-old you used to read to every night is now in college. Naturally, you are worried if he will be able to handle living on his own and whether he’ll keep up his grades to maintain his scholarship. With all the worries a parent has, insurance issues may be far down the list. However, they should be dealt with before the need for insurance arises.
College students pack their dorms with expensive personal belongings, e.g., computers, TVs, game systems, etc. If something is stolen, your homeowners' insurance personal property coverage should extend to your child’s dorm room. However, you should check your policy closely for limits on children’s age or coverage. Generally, policies limit you to 10% of the coverage of your in-home possessions. So if you have $150,000 in insurance coverage for in-home possessions, your child’s coverage would be $15,000. The deductible applies as if there were a loss at your home.
If your student lives off-campus in an apartment or house, be aware that the landlord’s insurance only covers the damage to the property. Renter’s insurance in your child’s own name is needed to protect personal property.
Thanks to the Patient Protection and Affordable Care Act, your child can remain on your health insurance, as a dependent until age 26. You should be aware if your insurance carrier considers the college health care center out-of-network—if the health care center accepts your insurance at all. You may want to check if your employer plan will allow you to move your child to a preferred provider organization network. Generally, they have larger networks of doctors and care facilities. Additionally, if the student travels while in school, be sure their health insurance coverage extends to overseas travel.
Finally, if your child takes a car to college, your auto premium can change, depending on the college’s location, the parking provided, and the amount of claims the insurer has paid in that location. Notify the insurance company of your child’s new address, as states differ in minimum coverage requirements.
William G. Lako, Jr., CFP®, is a principal at Henssler Financial, and a co-host on Atlanta's longest running, most respected financial talk radio show "Money Talks" airing Sundays at 10 a.m. on Talk 920 AM, WGKA.