If you’re like most parents, you probably didn’t give any thought to whether your college student needed any insurance at all. Before you ship them off, be sure you become familiar with the conditions and limitations of your own family policies and give due diligence to what the insurance industry practices and what is required by state law. In some cases, the college itself may impose conditions on the students as part of their enrollment and responsibilities. Regardless, you should consult your insurance agent or inquire with an insurance agency for answers to your questions and for general guidance. Most of the insurance coverage and concerns are focused exclusively on the full time student because for those who attend either part time or less than half time, they are most likely covered by an employer, a spouse, or parents.
Although not necessarily consider insurance per se, identity theft and cyber security are issues that affect everyone and are front and center in daily news. There are primarily three types of categories with regards to our personal information which the student must be every so diligent to protect – personal identity information (PII), personal health information (PHI), and Health Insurance Portability and Accountability Act (HIPAA). Your personal data may become compromised at any time either online or at the mercy of someone else such as an organization, business, healthcare provider, or the college. Instead of waiting for an incident to occur, be proactive and purchase an identity protection plan. You should take control of your data and limit its use and access – because just like insurance, you’ll be glad you did.
One such online resource that offers assistance with obtaining college insurance coverage and insurance in general is DFMurphy.com.
Here are five types of insurance coverage that every college should have:
Health insurance – most recently, as part of college admissions, students are being required to have health insurance of some type. The student may still be covered on their parents’ policy until age 24 and this too may be conditional. With recent changes in health care due to the Affordable Care Act, some of the major benefits for college students is the ability to remain on parents’ plans until age 26, regardless of financial dependency.
Tuition refund insurance – this type of insurance is of more importance for parents than the adult student. It typically is used in case of a serious illness wherein the student misses too much school and is forced to withdraw from college. Usually, this coverage is offered by only a few schools including private schools so that they provide tuition reimbursement and pay any outstanding school loans.
Auto insurance – this may not be the easiest to determine because it just doesn’t consider how much you drive in mileage but where you park and if you carpool using your own car. Another important factor is whether or not the car is paid off and the age for consideration in replacement costs and repairs.
Check with your agent and policy to determine the limitations and conditions. Research your policy and, if need be, find an insurance company that offers discounts – get good grades and you could save money on your premiums, for example. By virtue of parking on campus and in a parking garage, you could save more money too. The most cost effective means to lower your car insurance is to stay on your parents’ policy but also check into courses for safe or defensive driving because all of these factors will go far to reduce your overall insurance burden. Don’t forget that most companies will offer discounts for multiple policies too.
Life and disability insurance – statistically, you are more likely to become disabled for a period than become deceased from a similar event during your lifetime. The most significant asset you own is your ability to make money and sustain a career so insurance is much like taking a bet on your own circumstances – you hope to never have to use it but, if you do, you will be reassured that is will lessen the emotional and financial burden. Since most disabilities are health related, your ability to financially support yourself and family will be greatly diminished if not severe.
Having disability insurance means having to protect your income which is a basic risk management strategy that businesses apply regarding their employees. To determine how much disability insurance is required, talk to a qualified insurance agent or utilize an online calculator which will compare the coverage amount to the gross income that you make now.
Keep in mind, there are two primary types of disability insurance: short-term and long-term. The short-term is exactly what the name implies; it’s only to be used for minimal amount of time before having to return to your job. On the other hand, the long-term coverage is used specifically in those cases where the likelihood of returning to your job is unlikely or requires a very long rehabilitation period.
Life insurance is something that most 20-somethings never think about – they should. Unfortunately, the odds of death are low typically but the transition from child into adulthood is fraught with high rates of risk taking and includes high rates of suicide. Although this age group parties less, they are still prone to violence and death.
Renter’s insurance – this type of insurance is murky because it’s not cut and dried. Will the student live in the dorms, off campus, at home with the parents and commute, live in a house with roommates, or live with relatives nearby the campus? The amount of deductibles regardless will be a factor to be considered in terms of overall costs. It is always wise to inventory all personal items, take pictures, and document them for future reference. The best cost savings are found with living at home with your parents but a close second choice is living on campus in the dorms – consider any and all security measures regarding the school, dorms, parking, and general campus areas.