3 Types of Insurance to Protect Your College Student

Tuition may not be the only check you need to write if you’re sending a kid off to school this fall. Take stock of your health, homeowners and auto insurance to see which situations are covered and which aren’t, and when you might need to buy more protection.

Health insurance. Adult children can generally stay on their parents’ health insurance policy until age 26. But check to see whether your plan’s network of doctors and hospitals extends to the area where your student will live while at school. Many policies provide little or no coverage for out-of-network care, except for emergencies.

Your child may be able to buy a student health insurance policy. Many of these policies are more robust than in the past and no longer set annual and lifetime maximums. Others may have only basic coverage for the campus clinic and an affiliated nearby hospital. But that can be a good supplement to a parent’s policy that has little or no in-network coverage near the college, says Hector De La Torre, executive director of the Transamerica Center for Health Studies.

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Another alternative is for your student to buy an individual policy through the local health insurance exchange (go to www.healthcare.gov for links) or directly from an agent, insurer or Web site such as eHealthInsurance.com. (Some insurers only sell policies off the exchanges, so it’s best to check out both options.) If your student is still a dependent for tax purposes, he won’t qualify for a premium subsidy.

On-exchange and off-exchange policies cover the same ten essential health benefits and fall within the four metal tiers (platinum, gold, silver and bronze). Insurers may also offer catastrophic policies that have higher deductibles in exchange for lower premiums. People ages 18 to 24 paid an average monthly premium of $144 in the first quarter of 2014 for policies purchased at eHealthInsurance.com, with most people in that age group choosing catastrophic-level policies. Open enrollment for individual policies is closed until November 15, but students who move to a new state may qualify for a 60-day special enrollment period.

Renters insurance. Most kids leave home with a boatload of electronic gear, clothes and other stuff. If your child lives in an on-campus dorm, your homeowners insurance will usually provide coverage. Liability limits will be the same, but note that there may be a 10% limit on possessions coverage because the items are not in your home.

You may be able to add coverage for PCs, tablets and other pricey items—with higher limits and coverage for accidental damage—for about $50 to $100 per year, says Spencer Houldin, an independent agent in Washington Depot, Conn. If your student moves to off-campus housing, you may need to buy a basic renters policy, with $15,000 of property coverage and $500,000 of liability coverage, for $125 to $150 per year, says Houldin. Unrelated roommates may need separate policies.

Car insurance. If your child moves more than 100 miles away from home and doesn’t take a car, your premiums could drop by as much as 30% or 40%, and she will still be covered when she drives your car at home. If she takes a car with her, your premiums may increase or decrease depending on where she moves, says Bill Wilson, of the Independent Insurance Agents and Brokers of America. Students who maintain a B average or better qualify for a good-student discount of 5% to 15%.