College students and their families take many steps to financially prepare for the school year, such as saving money in a 529 account and signing up for a dining plan. However, there are a few additional steps that can help ensure your financial needs are covered.
Car accidents, stolen property, and injuries or illnesses are just a few of the things that can happen during the school year and derail your finances if you aren’t prepared for them. Having enough insurance (and the right kinds of insurance) is a vital part of making sure your family is financially protected in a worst-case scenario.
Are college students covered by their parents' home insurance?
Protecting your child’s belongings when they move away from home can be tricky, but home insurance can help ensure your college student is covered for damage from fire, theft, vandalism, and other types of property damage.
In the dorms: If your child is living on campus, their belongings are likely covered under your current homeowners insurance coverage. You’ll want to check the details of your policy to make sure you understand what is and isn’t covered for your child while they’re living away from home.
In their own off-campus apartment: Whether they’re living by themselves off-campus or with a roommate or two, your child won’t be covered under your homeowners insurance. They’ll need their own renters insurance policy in case their laptop is stolen or they lose their furniture in a fire.
Specialty coverage: Certain items have limited amounts of coverage (or aren’t covered at all) on a standard homeowners or renters insurance policy. If your college student has an expensive instrument they play in the school orchestra or a few pieces of heirloom jewelry, you may need to purchase scheduled personal property coverage to make sure they’re properly covered.
You can reach out to an insurance expert for assistance if you’re unsure what type of property coverage your child needs while they are away at school.
Find out more about homeowners insurance coverage for college students
Auto insurance coverage and discounts for students
College students can stay on your insurance policy whether or not they bring their car to school, but if your child is taking their car with them, remember to tell your insurer about the new address, where the car will be parked, and update the car’s annual mileage. Staying on your family’s insurance plan is usually much cheaper than getting a separate car insurance policy for your college student.
Luckily, you may be eligible for a few discounts based on your child going away to school.
Affiliation discount: Car insurance companies sometimes offer discounts based on specific affiliations. Your child may be eligible for a discount if they go to certain schools, join a specific sorority or fraternity, or if they make the honor society, so check with your insurance company to see if they offer affiliation discounts.
Student away at school discount: If your child attends a school far away from home (typically 100 miles or more) and doesn’t bring their car with them on campus, you’ll be eligible for a discount on your car insurance coverage.
Good student discount: If a student maintains a certain GPA (typically 3.0 or higher), they may be eligible for a good student discount.
Working with an insurance expert is a good way to make sure you’re getting every possible discount on your auto insurance and keeping your rates as low as possible.
Find out more about car insurance discounts for college students
Do students need life insurance?
Most students don’t need life insurance, but some should consider purchasing a life insurance policy. While some loans are forgiven if a student dies, students who have a co-signer on their student loans and students who are married or have dependent children may choose to purchase life insurance to protect their loved ones.
Parents who have children in high school or college need life insurance, but the amount of coverage you need will vary significantly based on your situation. For example, someone who has a robust 529 account to cover their child’s educational expenses probably needs less life insurance than someone who is paying for their child’s educational expenses out of pocket.
The best way to know how much life insurance is right for you is to work with an insurance expert and compare quotes from multiple companies.
Find out more about life insurance for students
Do students need disability insurance?
Disability insurance is designed to replace part of your income if you’re sick or injured and unable to work. Students typically don’t have large incomes or dependents who rely on their income to pay the bills, so it usually doesn’t make sense for a student to purchase disability insurance.
But parents who have children in school need disability insurance to protect themselves financially in the event that they’re unable to work. This is especially true for parents who are paying part or all of their child’s tuition and living expenses at school. Without disability insurance to protect your income, your child may be forced to take on the burden of additional student loans, or drop out of school altogether, if you’re disabled and unable to work.
Parents should consider purchasing both short and long term disability insurance to protect their families.
Find out more about disability insurance for students
Health insurance for students
Health insurance is arguably the most important type of insurance for students, whether they’re staying close to home or going away to school. Health insurance is an important tool for keeping your child healthy and safe, but getting coverage isn’t always easy. There are multiple ways to provide health insurance for your child, including:
Family plan: If you have health insurance, federal law states your child can stay on your policy until age 26 whether or not they are in school. In fact, they can stay on your policy even if they’re married, living outside the home, or have access to other coverage through their employer. [1]
Student coverage: Some colleges and universities offer student health insurance coverage. You can work with your child’s school to get them enrolled if they don’t have access to other health insurance coverage.
Health insurance marketplace: Anyone who needs coverage during open enrollment between November 1 and January 15, or experiences a qualifying event during the year such as losing other coverage, can sign up for health insurance through the marketplace at healthcare.gov.
