Sending Your Insurance Off To College

Congratulations, you have managed to put together the money to pay for your kid’s college education. You paid for the cost of the college visits with frequent flyer miles, application fees were paid for from your kid’s part-time job money, a new laptop computer was bought with the money from your tax return, books were put on your credit card, a new wardrobe was financed with high school graduation gift money and tuition, fees, room and board are being covered by a scholarship, work-study, a student and parent loan. The grandparents have thrown in enough phone cards to last at least six-months as well as airline tickets to bring the kid home for the holidays. Now, you are feeling pretty good. You have covered all the bases and are looking forward to parents weekend. 

This scenario is typical of many families. Unfortunately, parents still think of their college bound off-spring as children under their care and responsibility and that things will not really change until the kids graduate and go off on their own. Parents recognize that their children are young adults and the family’s social structure has changed but they often fail to recognize the family’s legal and financial structure may be significantly altered as well. If your child attends college, particularly if they attend college out of state, only part-time or, have medical problems you need to conduct a careful review of your insurance coverage. 

College students present special risks to themselves, their families and friends as well as others. According to a survey conducted by the Independent Insurance Agents of America Inc (IIAA):

• Nearly one in five college students rent an apartment.

• More than 100,000 property crimes on college campuses are reported to police each year.

• Thieves make off with an average of $1,250 in stolen student property per theft. One in 10 college students cause an auto accident.

• One in four college students gets a ticket for speeding or other motor-vehicle violations

• Nearly 70% of college students have a car at school 
  
  
  The IIAA notes, "An uninsured loss, such as the theft of a laptop, sudden illness or a liability claim stemming from a party mishap, can deal a devastating blow to a college student's limited bank account or the financial livelihood of a parent already struggling with high tuition bills." 

Sending Your Insurance To College Checklist

• Check with your insurance agent/company to determine if your college student children are covered under your auto plan. 

Some Questions and Considerations:

Are your college children covered out-of-state? Review your level of coverage to make sure you are adequately protected. Does the company offer discounts when children are attending college or for Dean’s List academic performance? If your college student is taking the car out-of-state you must notify the insurance company that the car is being garaged in another location. This will most likely change your premium. Can your college student remain on your policy if taking your car out-of-state? How are you and your college student affected when the student actually owns (holds title) to the car? If your college student has their own auto policy, do they have the right coverage to fit their needs and their budgets? 

Check with your insurance agent/company to determine if your college student children are covered under your health plan. 

Some Questions and Considerations:

Does your HMO plan provide out of state coverage? For example, if you have an HMO plan that does not provide coverage in the area where your student is attending college, then the student would only have emergency benefits and would have to come home or go to an area where coverage was provided for non-emergency type care. 

Will your full-time college student continue to be covered? Will your part-time student continue to be covered? Does the college offer student health insurance? Most colleges and universities offer student health insurance or individual policies can be purchased. Student health insurance is affordable and generally offers minimum benefits with high deductibles and dollar limits on coverage. As with all insurance, review these plans carefully. Take note of whether coverage is provided for students who get injured while playing intramural sports or engaging in other so-called dangerous activities, such as motorcycle riding, rock climbing or skiing. 

Usually, student health insurance plans are not network bound therefore students may access coverage wherever they go. 

Does you college student have special health needs, if so will these needs be covered under the student health insurance plan? Typically, for most health plans, 23 years of age is the automatic cutoff for dependent children as long as they are attending college full- time. The cutoff age for less than full-time status is generally lower. Confirm the cutoff age and enrollment status requirements with your health plan provider. For all other plans the cutoff age may be 18. 

Federal law allows dependent children to buy an additional 18 months of the same coverage your child had through your health plan through COBRA when they have been dropped from their parents' plan. This is particularly valuable, albeit expensive, to children who have special medical conditions. Please take note that not all benefit plans offer COBRA continuance. In addition, using COBRA may help your children qualify for better coverage later under the Federal Health Insurance Portability and Accountability Act (HIPAA). You should note that some plans might be exempt from HIPAA requirements. Be sure to discuss and understand your current health plan, COBRA and HIPAA with your benefits plan administrator or your insurer.