If your college-bound child is moving out of your home, we suggest taking the time to talk to your insurance agent(s) regarding the move.
The U.S. Department of Education reports that there were nearly 24,000 thefts in 2009. Additionally, the Consumer Product Safety Commission reports fires are on the rise on college campuses nationwide, with approximately 5,000 fires in 2009. Most of the fires are cooking-related, so students should be careful about the types of hot plates and microwaves they bring to school.
Personal Property
College students often pack their dorm rooms with expensive personal belongings taking computers, bikes, mp3 players, TVs, digital cameras, game systems, etc. It is important that these items will be protected in the event of damage or theft. Your homeowners’ insurance policy will typically cover possessions located outside your home. Similar to when you travel, if something is stolen, your personal property coverage extends to your child’s dorm room. However, you should check your policy closely for age limits for children or limits on coverage. Generally, policies limit you to 10% of 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.
We often suggest to clients that they should schedule some of the more expensive items, like a laptop computer, on their homeowner’s insurance policy, thus eliminating the deductible. Let’s say your child has a new laptop computer worth $2,000. If you have a $1,000 deductible and the computer were stolen or damaged, your insurance company would only pay $1,000. You might not be able to replace the computer for $1,000. By scheduling the item, you are insured for the full amount of the item. You will pay a fee for this coverage, but it is generally affordable. We suggest you inventory the items taken to college, noting serial numbers along with their estimated value. If you have the receipts, save them together in a file as proof of value.
Parents should also note that if their child chooses to study abroad or returns home for an extended period leaving their belongings in the dorm, homeowners’ policies generally will not cover the belongings after 45 days. In this instance, it would be advisable to ship belongings home or look into a commercial storage facility.
Renters’ Insurance
If your child is older than the age limit for college students on your homeowners’ policy or chooses to live off-campus in an apartment or house with a 12-month lease, you need to be aware that the landlord’s insurance covers the damage to the property, but not the tenant’s belongings. Renter’s insurance in their own name is needed to protect personal property. A renter’s insurance policy also provides protection if someone were injured on the property. Additionally, if the apartment or house is damaged and your child had to move during repairs, most renters’ insurance policies will finance the extra cost of a temporary living arrangement. For example, if your child lives in apartment and the unit above has a burst pipe causing water damage to the apartment, renters’ insurance should cover the damage to belongings and temporary living arrangements during repairs.
Renters’ insurance policies are generally affordable. In Georgia, on average, $20,000 of coverage cost $200 a year. Georgia renters insurance will cover you against about 15-20 perils, including theft, vandalism, fire, water damage, etc.
Auto Insurance
If your child goes to school more than 150 miles away from your home and doesn’t take a car you could receive a significant discount on your auto insurance. Some companies will allow the student to be rated as an adult rather than a youthful operator during this period away from home, at school without a car. But, the child is still listed and covered on your insurance so he can come home and drive during a break or holiday.
We do not suggest dropping your child completely from your auto policy. By keeping your child listed, he remains fully protected if he returns home for a long break or if he is driving a friend’s car while away. Depending on the policy, your child may also be protected if he’s hit by a car while walking or bicycling, or as a passenger in another car while away at college. Continuous coverage also may be beneficial when he obtains his own policy.
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.
Health Insurance
The Affordable Care Act of 2010 increased the dependent eligibility age and removed the part-time student requirement. Your child can remain on your health insurance, as a dependent until age 26. However, we suggest parents check that the college health care center accepts outside insurance, before there is an emergency. You should be aware if your insurance carrier considers the college health care center out-of-network. If your college student is attending school out-of-state, you may want to check if your employer plan will allow you to move your child to a preferred provider organization (PPO) network, as they generally have larger networks of doctors and care facilities. This may increase your chances your student will have access to in-network coverage. Additionally, if the student travels while in school be sure their health insurance coverage extends to overseas travel.
At Henssler Financial we believe you should Live Ready, which includes protecting your children and their belongings, even when they are not living at home. If you have questions regarding your personal insurance coverages, the experts at Henssler Financial will be glad to help. You may call our experts at 770-429-9166 or e-mail at experts@henssler.com.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
