Sending Your Child Off to College? Don’t Forget to Pack the Insurance

The college send-off is usually filled with a familiar checklist: bedding, towels, a laptop, textbooks, a mini refrigerator and enough clothes to get through the first semester without doing laundry every three days.

Insurance is probably somewhere near the bottom of that list.

But once a child leaves home for college, the family’s insurance situation can change in ways that are easy to overlook. A student may be living in a dorm, renting an apartment, taking a car to campus, borrowing a roommate’s car, carrying thousands of dollars in electronics, or simply living hundreds of miles away from home.

The good news is that parents often do not need to purchase an entirely new set of insurance policies for a college student. In many situations, existing homeowners, renters and auto insurance can continue to provide important protection. But there are limits, conditions and exclusions that parents should understand before the student heads off to campus.

A quick conversation with your insurance agent before move-in day can help identify gaps while there is still time to address them.

Start With Where Your Student Will Live

The first question is deceptively simple: Is your child living on campus or off campus?

That distinction can make a significant difference.

A student living in a college dorm may continue to have coverage for personal belongings under the parents' homeowners or renters policy. However, the amount of coverage available for property away from the primary residence may be subject to specific limits, and the policy may have conditions regarding the student's age, dependency and living arrangements. The National Association of Insurance Commissioners notes that students living on campus may be covered under their parents' policy, but parents should verify the applicable limits and exclusions rather than assuming everything is automatically covered.

And consider what is actually sitting in that dorm room.

A student may arrive with a $1,500 laptop, tablet, smartphone, gaming system, headphones, bicycle, camera, clothing and other personal property. Suddenly, that seemingly modest dorm room could contain several thousand dollars' worth of belongings.

If something is stolen or damaged by a covered loss, the question isn't simply whether the parents have homeowners insurance. The important questions are: Is the student covered? Where is the property located? What is the limit? What deductible applies? Are there special limits for certain items?

Those details matter.

The situation can become even more important when the student moves into an apartment or house away from campus.

Off-Campus Housing Can Change the Picture

Students renting an apartment or house should strongly consider renters insurance.

A common misconception is that the landlord's insurance protects the tenant's belongings. It generally doesn't. The landlord's policy is designed primarily to protect the building and the landlord's interests. If a fire, theft or other covered event damages the student's laptop, furniture, clothing or other belongings, the landlord's insurance generally isn't there to replace the student's property.

That's where renters insurance comes in.

A renters policy can provide coverage for personal property, personal liability and, depending on the policy, additional living expenses if a covered loss makes the rental temporarily uninhabitable. Liability coverage can be particularly important for a college student. If a guest is injured in the apartment or the student accidentally causes covered damage to someone else's property, the financial consequences can go well beyond the value of the student's possessions.

Renters insurance is also generally inexpensive compared with the potential cost of replacing an entire apartment's worth of belongings. The NAIC currently cites average premiums in the range of roughly $15 to $30 per month, although the actual cost depends on location, coverage and other factors.

So does every student living off campus automatically need a separate renters policy?

Not necessarily.

Some parents' homeowners or renters policies may extend coverage to a dependent child while away at school. But the extent of that coverage can vary considerably, and off-campus housing is an especially important situation to discuss with your agent. The NAIC specifically recommends checking with the insurer because a student's belongings may not be covered in the same way once the student moves into off-campus housing.

In other words, don't make the decision based on what happened to cover an older child, what a friend told you or what you remember from your own college years.

Ask.

What About the Student's Car?

The same principle applies to auto insurance: the student may be able to remain on the parents' policy, but the insurance company needs accurate information about the situation.

If the parents own the vehicle and their college student takes it to school, the child may be able to remain insured under the family's auto policy. But the insurance company should know where the vehicle will primarily be kept and used.

That new address can matter.

A car that normally spends the year parked in the parents' driveway may be exposed to a very different risk environment when it is parked overnight in a city, college town or campus parking lot. The insurer may need to update the garaging address, and the student's distance from home can affect the rating and available discounts.

The NAIC also notes that families with college-age children may qualify for discounts when a student attends school a certain distance from home and has limited access to the insured vehicle. Requirements vary by insurer, so it is worth asking rather than assuming.

There is another important consideration: Does the student actually need to take the car?

For some families, leaving the car at home may make more financial sense. If the student attends a school where a vehicle isn't necessary, removing regular access to the car may help reduce insurance costs, depending on the insurer and circumstances.

On the other hand, if the student needs a car for work, commuting, internships or daily transportation, maintaining appropriate coverage is essential.

And don't forget the vehicle itself. Liability coverage protects against injuries or property damage the student may cause to others. Collision coverage can help with damage resulting from a collision, while comprehensive coverage generally addresses non-collision losses such as theft, hail, fire or damage caused by an animal.

If the student is taking an older car to college, it may also be worth reviewing whether the existing physical-damage coverage still makes financial sense. That's a conversation to have with your agent rather than simply dropping coverage because the car is old.

What If the Student Buys a Car?

This is where parents should be especially careful.

If the student purchases a vehicle and the student's name is on the title, the insurance arrangement may be different from simply taking the family's existing vehicle to college. The NAIC notes that when a student's name is on the title, the student may need their own policy.

Ownership, registration, where the vehicle is kept, who drives it and who is insured all matter.

The safest approach is to contact your insurance professional before the student buys the car, not afterward. A quick conversation can prevent a situation in which the family assumes the new vehicle is covered when the policy was never intended to insure it that way.

Don't Forget the Laptop, Bicycle and Other Expensive Items

College students tend to accumulate valuable property without thinking of it as valuable.

A laptop may be essential to the student's education. A bicycle might be their primary transportation. Musical instruments, photography equipment, gaming equipment and other electronics can add up quickly.

Parents should consider creating a simple home inventory before the student leaves.

Take photographs or video of the major belongings. Keep receipts when available. Record model and serial numbers for expensive electronics and other significant property. Store the information somewhere other than the student's dorm room or apartment.

This isn't just paperwork for paperwork's sake.

If a theft or serious loss occurs, having documentation can make the claims process considerably easier. The NAIC recommends keeping an inventory that includes information such as purchase prices, model numbers and serial numbers, along with photographs or video of possessions.

It's also worth asking whether certain expensive items have special coverage limitations. Jewelry, collectibles, musical instruments and other high-value property may have specific limits under a standard homeowners or renters policy and may require additional coverage.

And parents shouldn't automatically assume that "covered" means "fully replaced."

Some policies settle personal property losses based on actual cash value, which takes depreciation into account. Others may offer replacement cost coverage, which is designed to pay the cost of replacing an item with a comparable new item, subject to the policy terms and deductible.

That distinction can become very noticeable when a five-year-old laptop or other expensive piece of equipment is stolen.

Liability May Be More Important Than the Stuff

When people think about renters insurance, they usually think about replacing their belongings.

But liability coverage may be just as important.

Imagine a student accidentally leaves a bathtub running and causes water damage to an apartment below. Or a guest is injured in the student's apartment and alleges that the student was responsible. Or the student accidentally damages someone else's property.

The potential financial obligation could be much larger than the student's bank account.

Renters insurance can provide personal liability protection, subject to the policy's terms, limits and exclusions.

For families with significant assets or higher liability concerns, it may also be worthwhile to discuss how the student's situation fits within the family's broader liability protection, including whether an umbrella policy provides any applicable coverage.

Insurance Isn't a Substitute for Good College-Room Habits

The best claim is still the one that never happens.

Students should take basic precautions with their belongings. Dorm rooms and apartments should be locked when unattended. Expensive electronics shouldn't be left in obvious view. Students should use strong passwords and enable two-factor authentication on important accounts.

A laptop containing years of schoolwork, personal photographs and financial information isn't just an expensive piece of electronics. It can also contain an enormous amount of personal information.

Students should back up important files, preferably automatically and in a secure cloud service or another location separate from the computer itself.

For students living off campus, parents should also encourage them to understand the rental property's safety features. Smoke detectors, secure exterior doors, deadbolts, fire extinguishers and, where applicable, alarm or sprinkler systems can all help reduce risk. Some insurers may also offer discounts for certain protective devices.

And roommates deserve some attention too.

A student shouldn't assume that a roommate's insurance covers their belongings. Each tenant's circumstances can be different, and sharing a policy may create complications depending on the policy language and relationship between the tenants. Students should ask before assuming that everyone in the apartment is automatically protected.

College Is Also a Good Time to Review the Family's Entire Insurance Picture

Sending a child to college is an excellent reason to review more than just the student's coverage.

Has the family recently purchased a new vehicle? Has the student acquired expensive electronics? Has the family's home undergone renovations? Are there valuables that weren't previously scheduled or specifically insured?

It's also a good time to review deductibles, liability limits and contact information.

For families with multiple policies, there may also be opportunities for discounts when homeowners, renters and auto insurance are written with the same company. Some insurers offer discounts related to good grades, driver education, distance from school and other factors, although eligibility varies.

Most importantly, tell your insurance professional about the change in circumstances.

A college student isn't simply a teenager living somewhere else. The student's age, dependency status, residence, vehicle, ownership of property and distance from home can all affect how insurance applies.

Before Move-In Day, Make the Call

The weeks before college are hectic. There are forms to complete, tuition bills to pay, dorm supplies to buy and approximately 400 things that somehow need to fit into one car.

Insurance can easily be forgotten.

It shouldn't be.

Before your child leaves for school, talk with your insurance agent about where the student will live, what belongings they are taking, whether they are taking a vehicle, who owns that vehicle and how often the student will return home.

Ask specifically:

• Are my child's belongings covered while living in a dorm?

• Are there limits on property kept away from home?

• What changes if my child moves into an off-campus apartment?

• Does my child need a separate renters policy?

• Is my child still covered under our auto policy?

• Does the vehicle's garaging address need to be changed?

• Are there discounts because the student is away at school?

• Are laptops, bicycles, musical instruments or other expensive items subject to special limits?

• What liability coverage applies to the student?

• Are there any exclusions or conditions we should know about?

There isn't one universal answer for every college student because insurance policies, state laws and individual circumstances differ.

The important thing is not to assume.

College is a major transition for a young adult—and an insurance review is a simple way to make sure the family is prepared for the unexpected. A few minutes with your insurance professional before the student heads off to school can help protect the belongings they've worked hard to acquire, the vehicle they're driving and, perhaps most importantly, the family's financial security if something goes wrong.

Because when parents are saying goodbye in the dorm parking lot, the last thing anyone wants to discover is that the one thing they forgot to pack was the right insurance coverage.