Sending a kid to college: insurance considerations

A student moving into a dorm in Tempe, Provo, Reno or Moscow is still, in insurance terms, a member of the parents' household, and most of the family policies keep covering them. But each policy reaches the campus differently. The auto policy follows the driver and the car, and needs to know which of them went. The home policy follows the student's belongings, but with a smaller limit and only into certain kinds of housing. The health plan follows the student everywhere and pays properly only inside its network, which may not include the college town.

This guide takes the policies one at a time, explains where each stops, and then sets out the changes in the order they should be made, because the two that matter most, the auto garaging change and the renters policy for an off-campus lease, both have to be in place before the car and the furniture arrive.

Auto: whether the car goes decides everything

If the student goes to school without a car, they stay listed on the parents' policy as a driver, because they will drive the family cars on breaks and a driver who has been removed and then borrows a car is the classic disputed claim. What changes is the rating. Carriers offer a distant-student credit for a listed driver who attends school beyond a set distance from home without regular access to a car; the premium falls because the youngest driver in the household is now rarely behind the wheel. Ask for it each year, since it is applied on request rather than automatically, and tell the carrier if the student comes home for a summer with full use of a car.

If the car goes with the student, the policy needs the new garaging address. A car parked in a Tucson apartment complex or on a Flagstaff street is rated differently from one in the parents' garage in Chandler, and the difference runs both ways: some college towns rate lower than the suburb the family lives in, some higher. The car's registration usually stays in the home state while the student remains a dependant, and the policy remains a home-state policy. A car crossing into another state for school is still covered; standard forms broaden to meet the destination state's rules automatically, so an Arizona policy on a car parked in Logan picks up the personal injury protection Utah requires for the time it is there, and a Utah policy on a car in Boise keeps its PIP whether or not Idaho asks for it.

Suppose a family carries a nineteen-year-old on its policy at a household premium of $3,600 a year. The student goes to a school six hundred miles away without a car and the distant-student credit takes the premium to $3,000. Two years later the student takes a car to school, garaging changes to the college town, and the premium settles at $3,400 with the good student discount applied against a transcript the carrier asked to see. All three figures are invented; what they show is that the same student costs the policy three different amounts depending on where the car sleeps.

Home policy and the dorm: covered, but with a smaller limit

A standard homeowner or renters policy covers contents belonging to a resident of the household while they are away from the residence premises, and a full-time student living in university housing generally counts as a resident, provided they are under the age the form specifies and lived at home before leaving. The catch is the limit. Property away from home is covered up to a fraction of the contents limit rather than the whole of it, and that fraction has to hold a laptop, a bicycle, a phone, textbooks and clothing at once. Theft from a dorm room, the commonest campus claim, is covered on most forms, though some carriers narrow it to theft with forced entry.

Two additions are worth considering. A scheduled personal property endorsement on the parents' policy covers a laptop, a camera or an instrument at an agreed value, anywhere, with no deductible, and it is the sensible way to insure the one expensive item a student carries. And the parents' liability coverage follows the student as a household member, so a dorm-room accident that injures someone is defended and paid under the family policy, which is a reason not to let that policy lapse or shrink while a child is away.

Off-campus housing: a renters policy of their own

The away-from-home extension is written for dorms. Once the student signs a lease on an apartment or a house near campus, many carriers stop treating them as a resident of the parents' household for contents, and every landlord will ask for proof of a renters policy at signing. A renters policy in the student's own name is inexpensive, covers contents at replacement cost if that option is chosen, and carries its own personal liability limit, which matters in a house shared by four students where a kitchen fire or a party injury is defended on the policy of whoever is named.

Roommates are the trap. A renters policy covers the named insured and relatives who live with them; it does not cover an unrelated roommate's belongings or their liability. One policy for the whole house, with one name on it, leaves three people uninsured. Each tenant needs their own, and the lease should be read for what it requires the tenant to carry, since some property managers name a liability minimum and want to be listed as an interested party so they are told if the policy cancels.

Health coverage: the network is the question

A student can stay on a parent's health plan until the age the plan and federal rules allow, and student status does not change that. The problem is geography. An employer plan built around a Phoenix network may treat every provider in Reno as out-of-network, paying urgent care visits at a lower rate and specialist visits sometimes not at all. Before the move, check whether the plan has in-network providers near campus, whether it has a national network tier, and how it handles emergency care away from home, which is generally covered at in-network rates regardless of where it happens.

Universities offer a student health plan that many require unless the student waives it by proving other coverage. For a student on a plan with no local network, enrolling in the school plan for the academic year is sometimes the better answer despite the cost; for a student on a plan with a national network, waiving it is usually right. Prescriptions should be transferred to a pharmacy near campus before the first refill is due, and a student with an ongoing condition should have a local provider chosen before, not after, the first flare-up. Because the student is now a legal adult, parents cannot speak to the doctor or the insurer on their behalf without a signed authorisation, and a medical power of attorney and a release form are worth signing before move-in day.

The smaller items: identity, tuition and study abroad

Three coverages come up in the first year and each is a decision rather than a default.

• Identity theft protection. Students have clean credit, shared housing and a habit of leaving documents around, and a stolen identity discovered at the first apartment application is expensive to unwind. Some home and renters policies include an identity restoration endorsement for a small premium; standalone monitoring is the alternative.
• Tuition insurance. It refunds tuition and fees if the student withdraws mid-term for a covered medical or mental-health reason after the school's own refund deadline has passed. Whether it is worth buying depends on the school's refund policy, which should be read first.
• Study abroad. Most domestic health plans pay little or nothing outside the country, and the auto and renters policies do not travel. A travel medical policy for the semester, with evacuation coverage, replaces them; the program provider often requires one and sometimes sells one, and the two should be compared.

The order, and the timing traps

Most college leases and dorm contracts start in August, a few weeks before classes, and the changes below are keyed to that date rather than to the first day of term.

• When the housing is confirmed: decide whether the car goes. Everything on the auto side depends on it.
• A month before move-in: check the health plan's network near campus and decide on the school plan or the waiver, since the waiver deadline usually falls before or during the first week of classes.
• Two weeks before: for an off-campus lease, bind the renters policy effective the day the lease starts, not the day the student moves in. A landlord who asks for proof at key collection wants a policy already in force.
• The week the car leaves: change the garaging address, or, if the car stays, request the distant-student credit. Do not remove the student as a driver.
• Before move-in: schedule the laptop or instrument on the parents' policy, photograph everything that goes into the car, and sign the medical authorisation forms.
• Every August: re-confirm the student's status with the auto carrier. Credits tied to school attendance and grades expire and are renewed on evidence, not on memory.
• At graduation or a move off the parents' plan: the reverse of all of this, and a new auto policy in the graduate's own name before the parents' carrier removes them.

How to use this

Send us the school, the housing arrangement, whether a car is going and the family's auto, home and health declarations pages. We apply the distant-student or garaging change to the auto policy, quote a renters policy for an apartment lease, add a scheduled item where one is worth it, and tell you what the health plan will and will not do in the college town. If the student is going to a dorm without a car and the home policy already reaches, the answer is one phone call to the auto carrier and nothing else.