Off to College? Make Sure Your Student Remembers Their Insurance
Moms and dads, we’d like to save you some trouble… potentially BIG trouble. In this blog, we are going to talk about three types of insurance, and the specific pieces to be aware of. The three types are renters insurance, auto insurance, and life insurance. Let’s dive in:
Renters Insurance- You may have already set this up (If not, call us at Aspire Insurance Agency!). It likely started when your student’s landlord informed them that they need renters insurance with a minimum of $100,000 in liability insurance- listing the landlord as an “additional insured” or “additional interest”. This prompts many individuals to contact their agent, or shop online, and search for the required insurance of $100,000 in liability.
Liability insurance is the most important part of the policy. It covers your student most places other than auto accidents, and business ventures, but the key reason you need it is in case of a fire. $100,000 may be what the apartment complex requires for you to get the keys, but you may want to consider a much higher amount. Liability insurance is relatively cheap, and a limit as high as $500,000 in liability may be less than $30 extra dollars per year. When considering how much to purchase, consider the value of the building you are renting, and the value of business interruption for the complex, if that building was unusable due to a fire.
Property Insurance- The second most important coverage on the policy and covers your belongings or “personal property”. Your home insurance policy may or may not provide coverage for your student’s belongings at school. The key benefits of a separate renters policy would include: any claims would affect the cheaper renters policy, remaining off your home insurance claim record; and your student’s renters policy will have a much lower deductible than your homeowners insurance.
Renters insurance will pay to replace common household items, but may have sub-limits on certain items more prone to theft, or with high intrinsic value. Examples include: Jewelry, silver, furs, guns, art, musical instruments, stamps, and money. If any of these are a concern to your student, be sure to consult with your agent ahead of time.
A couple more coverages you may want to ask for are identity fraud expense coverage and cell phone or computer coverage where available. When in doubt, we encourage you to speak to one of our agents.
Auto Insurance- Is your student taking a vehicle to school with them? Different folks have different opinions on whether or not it’s a good idea, but check your insurance either way. If your student is not taking the car, and is going to school more than 100 miles away, most companies will give you a discount for this!
If they are taking the car to school, be sure to have a talk with them on the use of the car. Letting their friend regularly borrow their car is a big No-NO! Drinking and driving is the obvious concern, and most auto insurance policies explicitly exclude “delivery”, or “ride-sharing” (uber, lyft, etc.) as well. That means that if your student were to rear-end another car while working, and God-forbid, hurt the passenger in that vehicle, your insurance company would not pay that bill. Your student could be facing a huge liability for years to come. College students can be tempted to make extra bucks in their spare time. Delivery is a tough one, but many times the ride-sharing can be covered with an endorsement. Just make sure to have your agent add that, if it’s true.
In every case, however, insurance companies reward good grades. There is a sizable discount for maintaining a 3.0 GPA or above!!
Life Insurance- We want to talk about life insurance (not death insurance) with you! Life insurance companies have evolved drastically over the last few years. Many companies offer a new feature called “living benefits”. This allows you to accelerate a large portion of the death benefit while you are alive, tax-free, for cases of chronic, critical, or terminal illness. If worse comes to worse, this feature could help your student stay in school, and pay bills if involved in a car accident, injured at a party, or contracting a disease from students around them. These benefits are available in both term life insurance policies as well as permanent life insurance policies. The fact that your student is young and healthy, is all the more reason to buy their life insurance now while it is affordable.
We welcome you to contact one of our independent insurance agents prior to the school year. Enjoy the rest of your summer!!