Insurance & Back to School
The dorm rooms and newly rented apartments are tricked out, the highlighters are uncapped, classes have begun and a new year of higher education is underway. Yet one part of the back-to-school checklist that many parents and students might have overlooked is how to ensure that college kids have the best insurance coverage -- ideally at the most affordable price.
A survey of young adults 18 to 25 found that 19% said they have a poor level of knowledge about insurance. Nearly half said they have a “good” idea about how insurance works. A bit over one-third said their insurance acumen is excellent. However, when asked about basic components of auto, renters, life and health insurance cover, many failed to answer correctly.
Here are a few things to note for each policy when heading off to college:
Car Insurance:
Liability coverage is the core of any auto insurance policy, and is required to drive legally in Pennsylvania, Delaware, and New Jersey. It pays for damage to other vehicles and property that you cause in an accident, up to the amount you choose, also known as limits. It also pays for others’ medical expenses injured in an accident you cause. It doesn’t cover damage to your own car.
Comprehensive and collision coverage are optional coverages, often sold together for cars that are less than 10-15 years old. Comprehensive pays up to your car’s actual cash value for damage from fire, theft, vandalism, and falling objects, after your deductible is paid out. Collision covers damage to your car in an accident, regardless of fault.
Tips:
Know your coverages. If you’re found at fault for an auto collision, the people you harm will claim against your liability coverages. This is why having higher than the state minimum limits of coverage is wise. Medical expenses and car repairs aren’t cheap, and low limits could be exceeded, leaving you personally responsible.
Notify your insurer. Changing your address will impact your premium rates. If you go to a college more than 100 miles away from home on your parent’s policy, often times your car insurance will offer you a discount. Failing to notify your insurer of a move can nullify your coverage- meaning it won’t pay if you get into an accident.
Quote the options. While oftentimes we think it’s cheaper for a student to stay on their parent’s policy, that’s not always the case. Consider speaking with an agent to see what the changes in cost could be if you get your own insurance policy.
Renter’s Insurance:
Renter’s insurance covers your personal possessions, items stolen from your car, guests’ injuries, and additional living expenses if the apartment is damaged. A year’s worth of renter’s insurance is often around only $200, so it’s an inexpensive way to protect you and your belongings in your home away from home.
Tips:
Don’t share a policy with a roommate. You are allowed to share your policy, and it that does save you money if you split the cost, but the savings is minimal. And, if a claim is filed on the policy, it’ll be on your history for three to five years, regardless of who filed the claim. That means if your roommate ends up making numerous claims on the policy, you could end up paying higher premiums for insurance long after your college days are over.
Buy as much liability coverage as you can afford. Liability limits on a renter’s policy covers the cost for injuries if someone trips, falls, or is hurt in your apartment. It also provides protection against lawsuits a guest may file for injury or damage you may have caused. A minimum of $100,000 is recommended, but ideally, you should have coverage up to $300,000. Check your lease- many landlords require renters to purchase specific liability amounts.
Life Insurance
Contact us directly to learn about your life insurance options, and how your money can work for you while you’re away at college.
