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Don’t forget insurance with college-bound kids

August 25, 2012

Don’t forget insurance with college-bound kids
Insurance needs are often overlooked in the last-minute scramble. But relying on
existing coverage — or a lack of it — can end up costing families during the
college years and perhaps beyond.

Parents don’t need to buy all kinds of additional insurance as they pack the kid off
to college. But they had better at least review their coverage to know whether
they’re prepared for that stolen iPad, trip to the emergency room or worse.

A look at key considerations for different types of insurance:

Auto Insurance

Car insurance is an area where families can actually save money.

Premiums may be reduced by 10 percent to 20 percent if the student attends a college
more than 100 miles away and doesn’t take a car. And, car on campus or not, some
insurers also offer a “good student discount” for those who maintain a B average or
higher.

Even if they might not qualify for either discount, parents should inform their
insurance company that a student on the policy will be relocating. It’s good to keep
insurers in the loop on such moves. Depending on where the college is, the cost
could go up or down.

PERSONAL PROPERTY

It’s not unusual for students to have thousands of dollars of electronic gadgets and
other belongings in their dorm rooms, from laptops and videogame systems to bicycles
and musical instruments. And they are popular targets for theft.

Such items typically are covered by the parents’ homeowners or renters insurance if
stolen — minus the deductible, of course. But coverage varies, so inquire about
any policy limits.

Taking a photograph of each expensive possession can help ensure receipt of its
proper replacement value if it’s stolen.

To protect against items being lost, or for extra coverage with a lower deductible,
renters insurance is available for usually around $150 to $200 a year. Deductibles
can be as low as $50 or $100.

Anyone living off-campus will need to get a separate renters insurance policy to
cover personal belongings, as will each roommate.

Life Insurance

Buying life insurance for a college kid might sound overly cautious, if not macabre.
But it can make sense for parents who co-sign for tens of thousands in private
student loans. Without it, they may owe the amount they co-signed for if their child
dies. Some lenders, but not all, will forgive loans for co-signers if the student
dies or is permanently disabled. Be sure to ask your lender first.

It’s possible to get a $100,000 term life insurance policy for a student for less
than $100 a year. That’s a bargain price to pay to avoid the risk of years of hefty
monthly payments if tragedy strikes.

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