5 essential types of college student insurance

Kathryn Hawkins

Parents: While you’ve probably already purchased electronics, dorm furniture and the requisite “Animal House”posters for your college student’s new accommodations, you may not have thought much about his insurance needs while at college.

Many college students are living independently for the first time in their lives, so there’s a lot you might not know about protecting your college student and his valuables.

Here’s a rundown of the most important types of insurance your child might need when away at college.

1. Health insurance.

Thanks to the Affordable Care Act, also known as Obamacare, your child is now eligible to remain a dependent on your health plan until age 26.

However, this is often impractical if he’s attending school out of state and can’t find any local in-network providers.

Fortunately, most universities offer health insurance plans that are often cheaper than traditional coverage — and, since they’re a school expense, your child can use his student loans to help cover premiums if necessary.

Due to Obamacare regulations, such plans also offer more comprehensive coverage than they have been in the past.

He can also seek coverage independently through the health insurance marketplace, which may be the most affordable option if he’s no longer considered a dependent on your tax forms.

In that case, he may be eligible for heavily subsidized coverage based on his income, or even for free insurance through Medicaid in some states.

2. Identity theft insurance.

College students are extremely susceptible to identity theft-related crimes: According to the Javelin Strategy and Research 2013 Identity Theft Report, 1 in every 5 fraud-related crimes was reported by a victim between age 20 and 29.

College students are a popular target for identity thieves for the following reasons:

• They frequently share personal data such as phone numbers, addresses, and their locations through social media.
• They may not use effective passwords to protect their accounts.
• They’re unlikely to shred personal documents, such as credit card statements and bank statements, before throwing them into the trash.

This results in “a perfect storm” for identity thieves, says Steve Weisman, a lawyer and author who focuses on cybercrime.

While it’s important for students to learn to create effective passwords and shred documents, purchasing identity theft insurance can also be a good way to safeguard against financial loss.

Weisman says it’s important to choose the right policy: “There’s a great variance among identity theft policies,” he says.

Identity theft protection plans typically include credit monitoring, scanning for threats, and assistance with recovery efforts, although they may have a cap on limitations: for example, LifeLock’s plans cover up to $1 million in recovery fees.

When choosing a policy, find out about the deductible levels, and whether it covers costs such as court fees and lost wages. Costs for such a policy are generally low, ranging from $10 to $30 per month.

Your homeowner’s insurance policy may also include identity theft coverage or allow you purchase a rider for fraud protection, so check with your insurer before purchasing a secondary policy.

3. Car insurance.

If you send your dependent child to college with a car, he or she should be able to remain on your existing family policy.

However, if your child is going out of state, it’s important to let your insurance company know that, Weisman says. “It may change the rates a little, but it’s important to give them the details to make sure your child is covered,” he says.

If your child isn’t covered under a family policy, he’ll need to purchase his own car insurance policy.

While rates are often higher for people younger than 25, he may be eligible for a good student discount for maintaining at least a B average, so make sure your college student keeps his grades up to keep costs down.

4. Renters insurance.

If your child is going to live at an on-campus dormitory, his possessions should still be covered under your family’s home insurance policy, although it’s important to notify your insurer about the changes, Weisman says.

However, the coverage limits for off-premises items is typically about 10 percent of your total insured value, so in many cases it will only provide several thousand dollars worth of coverage.

If your child is moving into off-campus housing that isn’t operated by the school, it’s important to purchase a separate renters insurance policy, as your kid’s belongings won’t be covered by your home insurance policy. Renters policies typically cost just $20 to $30 per month.

A renters policy can protect valuables such as laptops, TVs and other electronics, with typical policies offering up to $100,000 in coverage for item damage as well as personal liability.

“It also protects your items if they’re stolen or lost while offsite,” says Amy Bach, executive director of the nonprofit United Policyholders.

5. Electronics insurance.

Although most electronics items will be covered under your family’s home insurance policy for students living in dorms, or under a renters insurance policy for students in off-campus housing, it may still make sense to purchase an electronics insurance policy.

That’s because deductibles for home and renters policies are often so high that it’s not worth filing a claim.

For example, if you have a smartphone worth $400 and your homeowners insurance deductible is $500, you won’t be able to get any reimbursement from your insurance company.

By purchasing protection plans for your gadgets, you can insure them against theft, damage or loss, generally with no or a very minimal deductible. Such plans typically have low costs — one of the electronics insurance company Squaretrade’s smartphone plans starts at $4.99 a month, for instance.

They also generally provide protection against a wider variety of problems than typical homeowners or renters insurance policies.