The Hanover Insurance Group advises that as new high school graduates get ready to head off to college, parents would be wise to prepare for potential risks and liabilities, and to consider the insurance implications.
“Be proud of your child’s accomplishments but also be aware that having children in college raises new insurance considerations,” said Mark R. Desrochers, president, personal lines insurance at The Hanover in Worcester, Mass. “Fortunately, with careful planning, parents can minimize their liability risks and increase their peace of mind.”
Desrochers said local independent agents can help assess risks and put appropriate insurance protection in place to address the new realities of college life.
The insurer said the average college student will bring between $5,000 and $10,000 worth of personal property to college — ranging from technology, electronics and textbooks to clothing, furniture and bicycles. Most students will suffer a loss at least once, with the most common cause being theft and the most severe being fire and weather events.
“The property risks are much higher today. In the ’80s and ’90s, students didn’t carry a $500 phone in their pocket and a $1,500 laptop in their backpack,” Desrochers commented. “Talk with your insurance advisor about scheduling certain items of high value separately or purchase technology coverage, which often provides broader coverage and usually has a lower deductible.”
The Hanover said most homeowners policies classify a student’s possessions as “personal property located off premises” and provide coverage for up to 10 percent of the home policy coverage value. Listing the student’s residence as an insured location on homeowners and umbrella policies adds a level of protection.
For students living off-campus, another option is renters insurance, which often covers both property and liability coverage. The Hanover’s Desrochers advises parents to be mindful of whether policies cover actual cash value or replacement cost. “While replacement cost coverage is slightly more expensive, it covers the actual cost to replace items rather than the depreciated value of the items and is most often the better value.”
In the event of a property claim, it’s important to have proof of purchase for the items reported. The Hanover recommends taking time to create a “dorm inventory” with purchase prices, model numbers and photos before packing.
Car Sharing With Friends
As a general rule of thumb, auto insurance follows the insured vehicle more than the driver, the insurer said. So if a student brings a car to college and loans the vehicle to a friend, he or she is also loaning the car’s insurance. “You can end up with a claim because someone else got into an accident with your vehicle,” Desrochers explains.
Liability laws also follow the car’s owner, but can impact a driver as well. The Hanover said that for this reason, it is important to keep a student covered on the auto policy even if they are not bringing a car to school. If a college student borrows a friend’s car and causes an accident resulting in serious injury, both the parents of the driver and the car owner can be sued. “If you are sending a student to college with or without a car, you should talk with your insurance agent about the best option for your situation,” Desrochers said.
Some insurance companies allow policyholders to put a “hold” or reduce coverage while a student is away at school — particularly if the college is more than 100 miles away.
The 18-29 year-old age bracket accounts for 24 percent of all identity theft complaints, according to the Federal Trade Commission. The Hanover advises that before sending a child off to college, parents should take time to educate him or her about the potential lasting issues created by identity theft.
The insurer advises students not to carry social security cards or even the social security number. Students should also be wary of peer-to-peer sharing programs at school that create easy, unauthorized access to a computer. The insurer also advises students to avoid sharing credit cards, identification cards or PIN numbers with anyone, even a friend.
Since most college students are considered dependents, they are covered by their parents’ home and auto policy, which also means their parents can be held responsible for their actions.
For example, if a student hosts a party in a dorm or apartment, the parents could be held responsible for a variety of tragic outcomes. An umbrella policy creates an extra buffer to protect valuable assets like their home. These policies can be purchased for a few hundred dollars to provide coverage for legal judgments that exceed the standard auto or homeowners policy level.
Source: The Hanover Insurance Group