Mo. Insurance Department Offers Checklist for College Students

College students returning to Missouri campuses after winter break have a lot of things on their minds – buying books for new classes, settling back into dorms and apartments, and catching up with friends. Unfortunately, they’re probably not thinking about their financial security. Renters’ insurance, health insurance, loans and credit scores are all issues often neglected by college students, but these items should be in the forefront of their minds as they continue their college career, a written release by the Missouri Department stated.

“College brings many great opportunities to grow and learn, but it’s important that students take responsible steps to secure their financial future, so enriching experiences are not jeopardized,” said Doug Ommen, director of the Missouri Department of Insurance, Financial Institutions & Professional Registration.

Ommen provides this checklist to college students:

Renters Insurance: As college students return to campus after winter break, they bring with them new electronics, clothing, and other gifts they have received. It does not occur to most that these new possessions, worth hundreds or thousands of dollars, could be stolen or destroyed. Students should check to see if their possessions are covered under their parents’ homeowner’s policy while they’re away at school. If there isn’t such coverage, remember that a landlord’s insurance does not provide coverage for a renter’s possessions. Renters’ insurance can cover the personal belongings of those who rent an apartment or house. A renter can insure jewelry, clothing, electronics, furniture and any other items of value. If an individual should decide to purchase renter’s insurance, he/she should keep a record of each insured item’s purchase price and serial and model numbers. Taking pictures or videoing the possessions for documentation is also a good idea.

Health Insurance: While many students are insured by their parents’ health plan until age 23, students and parents should review their policy to see how it defines a full-time student and the maximum age of coverage. When college students marry, they will lose their status as a dependent under their parents’ policy regardless of age or status as a full-time student. Many colleges and universities offer inexpensive student health insurance plans, but students should remember that these plans may offer less extensive coverage. Some students may find cheaper health discount plans more appealing, but these plans are not health insurance. The discounts offered on medical services and prescriptions do not apply to all doctors and pharmacies in the area, and they often do not cover medical emergencies. “Up to 40% off!” does not mean that the cardholder will receive 40% off all services.

Students considering studying abroad should check with their insurance agent to see if additional coverage is needed when traveling to a foreign country. If their current health insurance will be invalid, some insurance companies offer short-term international coverage from 5 days to 12 months.

Credit cards: Credit card companies often target college students to become cardholders by offering free gifts, special introductory rates or bonuses. Students should shop around for the best rate, always pay the balance or at the very least, pay more than the minimum payment. Many students accrue large amounts of debt in college as a result of abusing credit cards. Unfortunately, the debt doesn’t go away when students graduate from college. They could be paying the debt off for years to come.

Student loans: Many students take out student loans to pay for classes and living expenses, but they should use it wisely because payments often begin six months after graduation or three months after becoming less than a full-time student. If all loaned money is not needed, the student may return the leftover funds which will reduce payments after graduation.

Title loans: Students should understand the consequences of signing the title of their car over in order to get some cash in their pockets. Title loans require the title to a car or piece of property as collateral. They are short-term loans usually with repayment required within one month, often with interest rates of more than 100 percent annually. If the loan is not paid in full, the lending company has the right to seize the property.

Payday loans: College students may want to evaluate the need for instant cash when signing up for a payday loan. Payday loans are cash advances secured by the borrower’s post-dated check and are required to be repaid within 14-31 days. At the end of the term, the post-dated check is withdrawn along with a fee ranging anywhere from 15-25 percent of the original borrowed amount.

If students have large amounts of debt or have missed or made late payments, their credit score is likely to be lower. A low credit score may have a negative impact on a person’s ability to get future loans. A person could receive a higher interest rate or may be declined completely. A low credit score may also increase a person’s auto and homeowners’ insurance premiums. It is important for individuals to monitor their credit rating and check for errors in their credit history on a consistent basis.

Source: Missouri Department of Insurance, Financial Institution & Professional Registration