Friday, July 31, 2015

Sending them off to college? Don't forget insurance

When you start packing your child off to college, add insurance to your checklist. You may need to make changes to your existing policies or add new coverage.

Health insurance

With medical costs on the rise, health insurance is essential. Without insurance, a broken leg could cost $10,000 or more. An emergency appendectomy could top $50,000.

You may not have a choice. According to a 2008 study by the Government Accountability Office, 30 percent of colleges and universities require students to have health insurance.

Here are some options:

Your best choice is to keep your children on your insurance plan. Under the Affordable Care Act, you can add or keep your children on your health insurance policy until their 26 birthday - even if they no longer live with you, are not financially dependent on you, are married, or no longer in school. The requirement, however, does not apply to adult children who are eligible for employer health coverage.

Many colleges offer low-cost student health plans ranging from simple accident policies to comprehensive medical plans. Annual premiums range from under $100 to more than $2,000. Check with the admissions office at your child's college to see what is available.

You may want to consider purchasing an individual health insurance policy, but this can be costly.

Life insurance

Many parents buy life insurance policies for their children when they enter college and then turn over the payments to them when they graduate.

There are two basic types of insurance: term and permanent. Term life insurance offers protection for a specific period - 10, 20 or 30 years. It usually costs less than permanent life insurance, which provides lifelong protection.

Policies are usually less expensive when the insured is young and healthy. For instance, a 19-year-old, healthy, non-smoking male can purchase $100,000 of term coverage for 20 years for $10 a month or lifetime coverage for $28 a month. Women usually pay less because statistics show they live longer.

Auto insurance

If your child is taking a car to college, your premiums may rise or fall depending on the type of car and the school's location. Contact your agent to discuss your options. It's usually best to keep your children on the family policy so they can benefit from multi-car and multi-policy discounts.

Renters insurance

If your child is living in a dorm, your homeowners insurance may cover his or her belongings. Check with your agent to learn about the rules and limitations. If your child lives off-campus, you should consider buying renters insurance, which will cover possessions and provide liability coverage. Policies cost about $200 to $300 per year.

Reducing insurance premiums for college students

When your children leave for college, there are tons of details to take care of – tuition, housing, books, spending money, etc. Make sure auto insurance is on your to-do list.

Whether they move 30 miles or 300 miles away, let your insurance agent know about the temporary address change. We’ll also want to chat about other changes and opportunities to keep your premiums as low as possible. For instance:
  • Consider sending your child to college without a car. Students going to college more than 100 miles from home without bringing a car can receive a distant student discount and still use the car during breaks as an occasional user.
  • Discounts also may be available for good grades and good driving records.
  • If your son or daughter takes a car to college, the premiums may vary depending on whether the college is in a rural or urban area.
  • If the college is in another state, you’ll want to make sure you comply with that state’s minimum insurance requirements and Florida’s requirements.

We advise parents to keep their adult children on the family policy until they have a good job and are able to pay for their own insurance. We’re here to help you get through this transition. Give us a call at 386-738-2000 so we can review your family coverage and make sure you have the insurance you need at a price you can afford.