How Does My Child Going to College Affect My Home and Auto Insurance?

Verifying that your brand new college student is properly insured protects them while also making sure your assets are protected as well.

The kids are starting to go back to school and if you have a student that is headed off to college you will want to review your insurance coverages before you pack up the car and head for campus.

Verifying that your brand new college student is properly insured protects them while also making sure your assets are protected as well. You can end up on the hook for the actions of a careless college student and the costs can be financially devastating.

Here are a few tips for properly insuring your student.

Car Insurance

While you may think it is finally time to dump Junior off of your car insurance and save a bit of money, think again. Unless your child plans to give up driving altogether until they purchase their own car and insurance, they still need the protection of your policy.

Here are a few common scenarios and the reason they may or may not need coverage:

Child Not Taking a Car to College

If you are sending your kid off to college without a car you should still leave them on your policy so they are covered when they come home for breaks and want to take your car out or so they are fully protected in the event they borrow a friends car at school.

In most cases, if their school is located at least 100 miles away from home and your college student is not taking a car with them, your insurer should offer a discount on your policy. Discount amounts vary, check with your agent to see if you qualify.

Child Taking a Car to College

Unless it is an absolute necessity, it is always cheaper for Junior to leave the car at home. However, if they definitely need access to a car the cheapest option is to keep them on your policy.

Make sure you notify your insurer where the car will be located. If your students new digs are in a less than stellar neighborhood you may end up paying more for coverage.

One way to save a bit of coin is through a good student discount. Requirements and the discount amount will vary by insurer but in most cases a B average is required and you could save 5 to 10 percent.

College Student Living at Home

If your student is going to a local college while still living at home and driving a vehicle that is registered in your name, they absolutely need to be on your policy. As you probably already know, this is an expensive option. Young adults are some of the most expensive drivers to insure.

Consider putting them in an older vehicle that doesn’t require collision or comprehensive coverage. This will help lower your premiums while making sure your liability risks are still protected.

Child Has Bought Their Own Car

This is probably the best scenario for a parent but is a pretty expensive option for a young adult. If your child has purchased their own car, which is registered in their name, you should drop them off of your policy and they should have their own insurance policy.

This should result in a major premium drop for you but Junior will most likely be forking up a substantial amount of money for their own coverage.

Homeowners or renters insurance

Students head off to college with all kinds of stuff these days and some of it can be pretty pricey to replace. You should definitely protect their possessions with either your homeowners policy or a separate renters policy depending on where they end up calling home on campus.

In addition to their possessions you also have liability concerns. A party that gets out of hand can leave you on the hook. Both your homeowners insurance and a renters insurance policy extend liability coverage but it is capped at your coverage limits so it is always wise to review your policy liability limits before dropping your student off at the dorm.

Dorm Life

If your child is calling the dorms home, your homeowners insurance should cover their possessions and offer liability coverage up to your policy limits. It is always a good idea to check with your insurance agent regarding coverage as some insurers put a cap on coverage for possessions that are located away from the main insured residence. Also keep in mind that high value items such as jewelry, collectibles and even expensive electronics may come with a coverage limit.

Off Campus

If they decide to move out of the dorms and into an apartment they will need a renters insurance policy. Renters insurance is extremely affordable and one of the best values in the insurance world. It will cover their belongings from damage, theft and vandalism as well as providing some liability coverage.

Liability Coverage

Liability coverage will pick up the tab if your child injures someone or their property and is an extremely important coverage to carry. If your child is not properly protected by liability insurance and the injured party decides to sue, your personal assets could be at risk.

Review the liability limits of your homeowner policy or renters policy and determine if you feel you are properly protected. If the answer is no, consider an umbrella policy. These are very affordable policies that up your liability coverage substantially. 

Also verify that the liability portion of your policy includes personal injury coverage, which would help pay the cost of a legal defense and/or settlement costs if your student was sued for objectionable posts or comments on social media.