You’ve purchased the backpacks, pencils and notebooks that your child is going to need for the new school year, but have you thought about your student’s insurance coverage? Experts say the beginning of a new school year is a good time to review your insurance coverage and determine whether your child is adequately covered for a variety of circumstances, including theft.
“Students heading back to school should guard their backpacks, athletic bags and instrument cases carefully. Items such as laptops, band instruments, iPods or sporting equipment can easily be stolen,” says Justin Herndon, a spokesman for Allstate. “Most homeowner’s insurance policies provide limited coverage for personal possessions when they are stolen away from home. We recommend an annual homeowner’s insurance review to make sure everything is properly protected.”
Some more expensive items that may not be fully covered include musical instruments, sports equipment and jewelry.
But what else should parents consider insuring?
Renter’s insurance for the college student
“These insurance needs may vary, depending on whether the student is moving into a dorm room or a private residence,” Herndon says. “If the student will be living on campus, the parents’ homeowner’s policy will often extend to a child’s belongings.”
Parents should not assume this is the case, though, and should double-check with their insurer.
A parent’s policy won’t provide coverage if a child moves to an off-campus apartment or private residence. When living off-campus, students should get renter’s insurance, which costs roughly $15 a month and offers coverage in case of theft, damage or a visitor’s injury.
Auto insurance for school-sanctioned events
“Some school districts are facing tough budget cuts and transportation, such as school buses, is one of the areas where they are cutting,” says Tully Lehman, a spokesman for the nonprofit Insurance Information Network of California. “As a result, for some extra-curricular events, parents may be driving their own child and other students to these events.”
Lehman says parents need to make sure their auto insurance covers passengers in the event that an accident occurs en route to a school-sanctioned event.
“If you are transporting school kids to/from an event and you are involved in an accident, your fault or not, without insurance coverage you could be seriously exposed financially,” Lehman says.
Injuries caused would be covered under the medical payments part of an auto insurance policy; in some states, including California, it’s not a requirement to purchase this. If you’re sued, your legal defense would be covered under the liability portion of your insurance policy.
It’s critical that parents who plan to drive students to a field trip or other school-sanctioned event ask their insurers about coverage. Parents also should contact their children’s schools to ask abut polices and procedures for transporting students, as they can vary from one school district to the next.
If you’re sending your child to an expensive private school or college, John Fees, co-founder and CEO of Sallie Mae Insurance Services, recommends confirming the school’s tuition refund policy. Check to see what refund amount, if any, you may receive if your student must leave school because of an unexpected injury, accident or illness.
Since private schools and college offer refund policies and have appeals policies, it makes sense for families to first figure out whether they actually need tuition insurance. College Parents of America offers tuition insurance as part of its membership. The plan includes protection for the non-refunded losses caused by an unexpected medical withdrawal, including tuition, fees, and room and board.
Insurance for young drivers
If your high school or college student will be driving, remember that the safer the vehicle, the lower your insurance premiums will be. Adding a teen driver to the parents’ policy jack up the premium by 50 percent to 100 percent, according to the nonprofit Insurance Information Institute. Even if your young driver has passed the teen years, insurance still can be pricey.
To ease the financial burden, be sure to check into whether your young driver is eligible for a “good student” discount.
Parents often mistakenly believe a healthy child doesn’t need health insurance. That belief could be short-sighted, though. Several options are available if you do want to cover your student.
The federal health care reform law lets parents keep their adult children on their health insurance plans until age 26.
Also, many parents don’t realize their kids are eligible for free or low-cost health insurance. In addition, many insurers sell “child only” health plans for children 18 and under, with no parent or guardian listed on the same policy. Under these plans, children can’t be declined because of pre-existing health conditions.