College is the learning experience in life, but parents can start their student’s higher education before he or she leaves home.
“Now, when they’re getting their acceptance letters, is a good time to talk about not just the concept of insurance but how their behaviors can impact insurance,” said Christie Alderman, vice president and new products and services manager at Chubb Personal Insurance.
There’s insurance and there’s insurance. One aspect is coverage for things such as theft, medical and autos. The other is risk management, not engaging in behavior that could result in liability.
Most 18-year-olds have just a passing knowledge, at best, when it comes to the world of liability, co-pays and deductibles. Another thing parents can do in advance of college is shift some insurance costs to their son or daughter if the student’s finances can handle it. The child will gain some financial independence and get a feel for how insurance works.
Here are some topics a college-bound student should be familiar with:
With the increase in online exposure — Facebook, Twitter and the like — there’s also an increase in risk. Comments about a professor or fellow student can expose a person to potential liability or can torpedo a college career. The Media Law Resource Center cites on its website about 10 lawsuits against bloggers that it says, in total, resulted in awards of more than $16 million.
“You have to be very careful,” Alderman said. “I tell students to stick with facts. You can say, ‘I felt uncomfortable, don’t date him,’ as opposed to, ‘Don’t date him, he’s a con artist.'”
Not all policies include it, but a broad liability policy should automatically include coverage for libel. Alderman said a good liability policy “will cover the legal expenses to defend you from a related suit even if the suit is groundless, false or fraudulent. However, if there is a resulting judgment against you, it would also cover the amount you are legally obligated to pay for the injury up to the limits stated in your policy.”
Missy Dundov, a spokeswoman for State Farm Insurance, points out that children considered dependents most likely will remain covered by a parent’s auto or homeowner insurance. There are advantages and disadvantages.
If a student rents an apartment, there is some coverage under the parents’ homeowners policy, but the deductible can run about $1,000, Dundov said.
“Renters (insurance) costs about the cost of a pizza a month,” she said. “And they can get better coverage. … Also, it’s something for parents to consider because (otherwise) any claim would go on their policy.”
Have your student do his or her homework to learn the extent of your health insurance. Equally important, how does one, when on campus, get medical care and report a claim? What if he or she sprains an ankle working out or breaks something in a pickup basketball game? Does your student know what to do?
“Generally, I think it’s a really good idea for parents to sit down and tell kids, ‘Here is what you should do in an emergency situation. Here’s what you do, here’s how you’re covered,'” Alderman said. “Have the kids prepared to respond (to an emergency). Run through scenarios. It’s really empowering.”
Dorm rooms are a gold mine for thieves. Campus security can stop outsiders from gaining access to a building, but that stranger down the hall or that visiting friend of a friend could have sticky fingers. Laptops, cameras, cash, iPods, financial documents and other valuables should be locked in a safe or other secure location. Use your campus visits to do some homework.
“Are there ways to lock up valuables, can you screen a roommate, what is the access to your building?” Alderman said. “All good things to talk to your students about.”
Dundov suggests parents explore personal-article policies.
“The nice thing, there’s zero deductible, or it’s very, very small,” she said. “Let’s say you’re up late studying and you spill ramen noodles on your laptop. With this you can get the laptop replaced.”
Legal documents and credit card or bank statements may contain information that can be used in identity theft. Lock them away or get a paper shredder; maybe several students can go in on one.
“Probably more concerning (than property theft) is the identity theft we see emerging,” Alderman said. “We think of it as an online risk, but it’s often perpetrated by someone you know. So keep your roommates at bay. Use a paper shredder, shred those credit card solicitations that every student gets. Make sure they know what to do if identity theft occurs, and make sure it’s not happening.”
Several insurers offer identity restoration coverage. At State Farm, for example, parents can add it to a homeowners policy for $25 a year. It covers expenses and a counselor to help the student get through the process.
Most students remain covered by their parents’ policies. Good-student discounts also apply in college, not just high school. There’s also a student-away-from-home discount.
“If you’re going to school more than 100 miles from where you’re from, and you leave your car at home, you can get a pretty good discount,” Dundov said. “You can come home, use your car, and you’re covered. But this is a discount a lot of students and parents don’t realize is available.”
There’s a growing concern about GPS technology in smartphones.
“It really allows you to understand where your child is at any time,” Alderman said.
But there is a downside.
“You can track where pictures (being posted) are coming from, where people live, where they go to school, where they hang out. I think there’s a worry that there’s more opportunity for stalkers. It’s also makes it easier for theft; they know when you’re not home. We tell people to turn off that GPS on their smartphone before making a lot of posts.”
By William Hageman, Tribune Newspapers
March 2, 2012