THURSDAY, AUGUST 9, 2012
Getting your kids ready for College? Get your insurance ready too.
You did what?
Does the new freedom away from parental supervision cause you to worry about your new college student? Well most insurance companies consider full time college students to be residents of their parent's home, temporarily residing elsewhere if they are living in a dorm. If your full-time college student is living in the dorm, the personal liability on your home insurance would extend coverage in most cases.
They also consider your dorm room contents to be personal property off premises. Off premise personal property is subject to a 10% limit of the total personal property limit so if you have 100,000 of contents coverage on your home insurance then your off premise coverage would be 10,000. That sublimit is still subject to the home insurance policy deductibles. If you want a lower deductible for your college student you may want to consider a separate renters insurance policy which also allows you to keep any claims off your home insurance policy.
Does my college student need a separate renters insurance?
Since some students do not live in the dorms and elect to rent an apartment or house, you will want to get a renters insurance policy which runs anywhere from $10 -$20/month to have 15,000 of contents coverage. Most insurance companies consider apartments or houses to be a permanent residence. Therefore, the apartment will not be covered under the parents’ homeowners/renters policy for contents or liability.
Generally, the person who signs the lease is held liable (and may be sued) if someone is injured on their leased premises or by their property. A roommate or parent may also be sued, whether they’ve signed the lease or not, if the injured party thinks the roommate or parents might be responsible for the claim.
Regardless of who signed the lease, when your child is living off-campus they should obtain their own renters policy. Many insurance companies will not insure multiple names, or unrelated names, on a single policy. However, if you, as a parent signed the lease, you and the student should be named as insureds on the policy.
The annual premium for renters insurance is very reasonable, usually less than $250 a year for about $15,000 worth of contents.
Studying abroad can provide a host of insurance issues. For example, an insurance company can suspend theft insurance at a student’s domestic residence if he/she has been studying abroad for more than 45 days. Call Suzanne Brown at 713-899-4651 to make sure your child is covered in at least the following major areas:
• Theft of personal property
• Trip cancellation/interruption
• Emergency medical evacuation and/or repatriation coverage
• Health and/or hospitalization
Few colleges allow freshman living on campus to bring their cars. But 70 percent of the rest of the students have them. Things to consider if you child has a car:
1. Leave the car at home: You will get a discount for any student away more than 100 mile without a car. Even if they leave their vehicle at home, you will want to keep them on the policy in case they drive a roommate's car at school. If you remove them they will not have the coverage they may need if they drive someone else's vehicle.
2. Take the car to college and:
• Notify your insurance company that the car will be garaged in another location. Premiums can be affected positively or adversely by a location change.
• Discourage your child from allowing others to drive the car. Regardless of who may be using the car and for what purpose, your child is still responsible for the car and what is done with it.
Out of sight, out of network
Health insurance coverage is complex, at best. Imagine the potential difficulties for your child when they’re away from home. Problems can surface without warning, so it’s a good idea to familiarize your child with the coverages and emergency provisions of your plan and policy.
Mistakes in this area can be extremely costly and plans vary widely, so check with your health-plan administrator in advance to minimize surprises.
Here are some of the major issues to resolve before your child leaves for school:
• Age cutoff—Full-time students between the ages of 18-23 can usually be covered under their parents’ health plan. Some plans have younger age cutoffs. Most require proof of continued enrollment from the school in order to keep coverage in force.
• Full-time or part-time—The definition of full-time or part-time student can vary between colleges and health plans. You will need a signed document from the enrollment officer or registrar for your insurance carrier to demonstrate full-time status.
• In network—If your health plan has a physicians’ network where your child is going to college you will need a referral from your local physician.
• No physicians’ network—Your plan may offer an indemnity option where you will pay 80 percent of all medical bills and the insurance company will pay 20 percent. Find out before your child leaves for school.
• College health plans—Most colleges offer some type of limited, campus-based, infirmary or emergency health care. Ask the registrar or student health services director for details.
• Ineligible—Your child is no longer eligible on your plan? Many colleges and insurance companies offer affordable, extremely limited health insurance plans for individuals. If the student is working while attending school, check with their employer to see if any health insurance benefits may be available.
Insuring your legacy
Experts recommend obtaining or increasing your existing life insurance to cover the total cost of your child’s tuition. When figuring that cost you will want to include: tuition, room and board, transportation, books, and supplies. Whether you have a college fund prepared for your child or are paying as they go, life insurance is a secure method to safeguard your child’s education.
Please call our office at 713-899-4651 for your Houston home insurance questions and we can help get your student ready for college too.
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