Key points
- Before your child goes to college, consider their renters, auto and health insurance needs.
- Your homeowners or renters insurance policy may extend to your child if they are living on campus, but it may not be enough coverage.
- Your child can typically stay on your auto insurance policy as long as your home is their permanent residence.
- If your child has health insurance, find out if the policy covers providers and medical facilities near campus.
College is a big milestone for you and your child, especially if it means they’re moving away from home. College comes with many expenses, like tuition, student loans and housing, but there is a less obvious but notably important one: Insurance.
Namely, what insurance do college students need? When are they still covered by a family plan, what coverage does the college itself offer and how can you keep various insurance costs down as your child transitions into adulthood?
We’ll help you understand common insurance needs among college students and how you can ensure your undergrad is properly protected as they enter into this new stage of life.
Do college students need renters insurance? It depends
In certain scenarios, college students may need to purchase their own renters insurance policy, but they’ll often be covered by their parents’ renters or homeowners insurance. It all depends on where they call home during the academic year.
For students living in on-campus housing
If your child will be living in on-campus housing, renters insurance is typically optional.
“If the student’s family home is considered their legal permanent residence, they may have some coverage under their family’s home or renters insurance policy. However, the limits to cover personal property of a family member living in a dorm are typically very low (a 10% cap) in those policies.”
Mark Friedlander, Director of Corporate Communications, Insurance Information Institute
If you’re worried that your policy’s personal property coverage isn’t enough to cover your child’s items in on-campus housing, you have options.
For instance, students can simply leave high-value items back at home if they’re worried about damage or theft, or they can look into their own standalone renters insurance policy. Renters insurance is generally available through any company that sells home and auto insurance, but your child may also be able to secure a policy through their college or university.
“Many colleges and universities offer a reasonably priced insurance plan to cover personal property of students living in on-campus housing,” said Friedlander.
For students living in off-campus housing
If your child will be renting an apartment or house near campus, they will likely need to purchase their own renters policy. In fact, their landlord may even require it.
“The family’s primary home or renters policy would not cover a student living in an off-campus apartment or house,” said Friedlander.
The average cost of renters insurance is generally between $14 and $25 a month, or $168 to $300 a year — but it can be cheaper (or more expensive) depending on where you live, the insurance company and how much coverage you buy. Students can keep renters insurance rates low by comparing quotes from at least three insurers and qualifying for discounts.
If students can’t afford to pay out of pocket for renters insurance, they may be able to use student loan funds to cover these costs, though it’s wise to weigh the pros and cons of doing so.
Car insurance requirements for college students
If your college student is a licensed driver who plans to use their car during the school year, they will definitely need to maintain coverage. But what if they’re leaving their car behind?
Even if your licensed college student isn’t taking their car to campus, it’s generally advantageous to maintain car insurance. Keeping them on your policy avoids a gap in coverage, which may lead to higher rates when they need car insurance again. It can also ensure they are ready and legally able to drive if they’re home for break or even in the event of an emergency.
Fortunately, most car insurance companies allow college students to remain on their parents’ policy as long as they maintain the same primary residence, even if the student is away at school most of the year.
“The student would need to stay on the family policy if the home is considered their legal residence,” said Friedlander. “This is typically much cheaper than purchasing standalone coverage for students under age 25.”
Once your child officially moves out of your home, they’ll likely need to get their own insurance policy.
If you’re not sure when or if your child needs their own car insurance policy, contact your insurer to learn more about policy particulars.
How to save money on auto insurance for college students
It can feel frustrating to pay for auto insurance coverage if your student attends school without a car, but you can keep costs down with a couple of car insurance discounts designed for college students.
“Many insurers offer a ‘distant student discount’ for a family member who attends college at least 100 miles away from home and doesn’t have a car on campus,” said Friedlander.
And if your student earns good grades (at least the equivalent of a B grade point average, according to Friedlander), they may also qualify for a good student discount.
Health insurance for college students: What you need to know
Renters and car insurance for college students may feel straightforward enough, but health insurance can get a little bit messier — and age plays a big role.
Students 25 or under
“Dependents under the age of 26 can stay on their parents’ policy when they go out of state, but it’s important to consider if the insurance is on a network that will work out of state,” explained Dr. Noor Ali, a healthcare advisor. “Most PPO plans, for example, offer nationwide coverage and work outside of state lines.”
Other policies, however, may be more state-specific. If your child is heading to another state for school, or even another region, doctors near their campus could be considered out of network. If your health insurance doesn’t offer much in-network coverage where your child is attending college, you might need to get them on a new policy.
Luckily, many colleges and universities offer their own student health insurance plans, many of which may be included in tuition or available at an affordable rate, according to Dr. Noor.
For instance, “University of Idaho offers a full 12-month insurance policy that students can opt into,” said Anita Packwood, operations manager of Student Health Services at the University of Idaho. “This covers students over winter and summer breaks, and our specific plan is a part of a national network.”
According to Packwood, her university requires students to carry health insurance to attend school. In some cases, a family plan (particularly if the family is out of state) may not meet minimum compliance requirements set by the school, in which case the university automatically enrolls the student in its own insurance program.
Students 26 or older
If your student is 26 or older, they will likely no longer qualify for coverage under your health insurance policy. They’ll need to apply for their own policy through the university, a full-time employer or through another provider.
“If they’re a full-time student without a job, tapping into the state’s government ACA (Affordable Care Act) plans on the public marketplace is the best place to begin,” advised Dr. Noor. “These plans are income based and offer a sliding scale subsidy based on lower income levels.”
Packwood also offers advice for students who can’t or shouldn’t stay on their family policy: “My office always suggests to students to investigate Medicaid in the state they are attending school. It’s an insurance that students more than likely can qualify for, and if a student is in the 25 to 26 [age] range, they have more than likely established residency [in the state of their college].”
Plans can quickly become expensive for college students, particularly if they have only a part-time job (or no job at all). Review with your student how to save money on health insurance so they can avoid taking out additional student loans to pay for coverage.
Purchasing insurance for your college student
Before your student takes off for college, spend some time reviewing their potential insurance coverage needs.
- For renters and car insurance, you can speak with your current insurance agent to understand how and if your coverage will extend to your child when they leave for college.
- For health insurance, you’ll need to review your own policy and consider what providers and medical centers are in-network near campus. You can also look into the campus health plan, if applicable.
When in doubt, don’t forget your friends, family, coworkers and neighbors whose children have navigated higher education needs before you and your child. If they’ve recently sent a child off to college, they may be able to offer advice or insight into their own experience. Hearing their perspectives — and how they maximized savings — can be reassuring during what is often a time filled with excitement, a bit of anxiety and a lot of questions.
