Sending a student to college can be an emotionally trying time. Remembering to pack everything they will need while away from home is a challenge and so is understanding your changing insurance needs. The North Dakota Insurance Department offers these tips to help you review and update your insurance policies to cover your college student.
If you're an adult younger than 26, you can stay on your parent's insurance coverage as long as you are not offered health coverage at work. This federal health care reform provision is available to unmarried and married individuals. However, the federal health care reform law does not supersede North Dakota insurance law, which requires most health insurance policies to provide coverage to certain adult children up to 26 years of age regardless of whether the adult child has employer-sponsored coverage. State law also requires coverage of dependents of dependents and of certain adult children of any age who are disabled. So a young adult may not qualify for dependent coverage under the federal law but could qualify under the more generous state law.
Know Your Policy
Before leaving home, make sure your student has a copy of the relevant insurance cards and knows about obtaining referrals and approvals (if necessary) before seeking treatment. If you are insured by a health maintenance organization (HMO), check to see if your student will be outside the HMO service area while away at school. If this occurs, the student likely will have coverage for emergency care but might have to travel to a physician or hospital within the HMO service area for routine care. If your insurer is part of a preferred provider organization (PPO), your insurer may pay benefits at out-of-network levels if you are outside your network. Check your plan provisions or speak with your insurer to find out what level of benefits are provided by your policy.
Student Health Insurance Plans
Students who don't have health insurance through a parent's health insurance policy or through their own employer, or who have limited coverage due to network service areas, may buy a student health insurance plan. Student plans are sold by an insurer that has contracted with a college to offer coverage to its students. In general, these plans have more limited benefits and more exclusions than traditional health insurance plans. For example, most student plans have limited catastrophic coverage of $50,000 per accident or illness. Many policies also will exclude routine examinations and injuries sustained while under the influence of alcohol or drugs.
Dental and Eye Care
Routine dental care and eye care generally aren't included as part of a health insurance plan, although many will cover non-cosmetic dental work that is medically necessary due to an accident. In addition, some plans may include limited coverage for dental procedures, such as the removal of wisdom teeth. Finally, most health insurance plans do not cover expenses related to periodic eye examinations, glasses or contact lenses. Most health insurance plans do, however, cover medical care as a result of an eye disease or injury.
Many colleges provide limited or basic health services on campus through a student health clinic. If available, these services are usually provided at little or no charge. Students should inquire to see what their school provides.
Purchasing Health Insurance After College Graduation
College graduation brings many life-altering changes and marks an important transition into adulthood. In making important post-graduation decisions, such as where to live and work, be sure that you do not forget to secure a health insurance policy. Foregoing health insurance is a dangerous decision. Accidents and unforeseen illnesses can be financially devastating. It is vital that you know when your coverage ends after graduation and weigh carefully the repercussions of not being covered.
Review Your Health Insurance Needs
First, be sure you are aware of the exact date your health coverage expires under your parent's policy. Keep in mind that if you're an adult younger than 26, you can stay on your parent's insurance coverage as long as you are not offered health coverage at work. This health care reform provision is available to unmarried and married children.
You will want to ensure there is no lapse in health coverage from the time your coverage under your parent's policy expires until your new policy takes effect. Choose the kind of policy that has benefits that most closely fit your needs. Does your family have a troubled health history that puts you at risk for developing a medical condition? If so, you will want to choose a health plan that has more extensive coverage, even if it means paying higher premiums while you are young and healthy.
Know Your Options
There are numerous health insurance options available for recent graduates:
- Consolidated Omnibus Budget Reconciliation Act (COBRA) - if you have been covered under your parent's health insurance policy while you were in college or by a plan offered through your college, often this coverage ceases when you graduate. For periods of no coverage, you should check to see whether you can extend your parent's coverage for a short-term period under COBRA. This will provide you with health insurance you are familiar with, though it often comes at a high price.
- High-deductible major medical policies - if you can't afford regular health insurance, a more affordable option is purchasing a high-deductible, major medical policy that only covers serious or catastrophic health costs. It will offer lower premiums than regular health insurance policies and help you cover bills for "major" medical events, such as surgery, hospitalization or emergency room care, but typically will not cover routine doctor visits or check-ups.
- Short-term health insurance - short-term health insurance policies are available for lower premiums than other types of health insurance and may provide the exact coverage you need as you transition from college to permanent employment. Short-term health insurance is not intended for those with pre-existing medical conditions and is typically available only for a short period time (between six to 12 months). Short-term plans are sometimes purchased on a month-to-month basis and generally have more limited benefits, exclusions and caps than traditional health insurance plans. Some colleges also offer an option to extend a university health plan.
A significant move away from home can have a big impact on your auto insurance policy. If your student is taking a car with them to school, check with your agent about the existing insurance policy. Ask about the rates for the college's city and state before deciding whether to keep your student's car on the family's auto policy. In addition, the insurance company should be notified each semester if the student maintains good grades. Maintaining a certain GPA might make your child eligible for a good student discount.
College students renting an off-campus apartment or house while away at school should consider purchasing renters insurance to protect their personal property, such as computers, electronics, televisions, bicycles, textbooks or furniture, in the event that it is damaged, destroyed or stolen. Even if a student is a dependent under his or her parent's insurance, the student's personal property, in many cases, is not covered if the student lives off campus. Parents should check their policy or contact their insurance agent to see if renters insurance is right for their son or daughter who is away at school.
What is renters insurance?
Renters insurance protects your personal property against damage or loss and insures you in case someone is injured while on the property.
Why purchase renters insurance?
If you live in a rented apartment, house or condominium, your landlord's insurance doesn't cover your personal property in the event that it is stolen or damaged as a result of a fire, theft or other unexpected circumstance. College students living in off-campus housing are ideal candidates for needing renters insurance, since many students bring thousands of dollars worth of personal items, such as electronics, a computer, textbooks, clothes, furniture and a bicycle, with them to school. It is the renter's responsibility to provide coverage for these valuable items. However, if a college student is under 26 years old, enrolled in classes and living in on-campus housing, the student may be covered under his or her parent's homeowners or renters insurance policy. The premiums for renters insurance average between $10 and $30 per month depending on the location and size of the rental unit and the policyholder's possessions.
Most renters insurance policies provide two basic types of coverage - personal property and liability. Personal property coverage pays to repair or replace personal belongings if they are damaged, destroyed or stolen. This is the most commonly purchased renters policy. Liability insurance provides coverage against a claim or lawsuit resulting from bodily injury or property damage to others caused by an accident while on the policyholder's property.
Unusually expensive items, such as fine jewelry or an art collection, may require the renter to purchase additional coverage, called a "rider" or "floater." Your insurance agent can help you determine if additional coverage is necessary.
Shop for the Right Coverage
Another important factor to look for when shopping for renters insurance is "actual cash value (ACV)" vs. "replacement cost" coverage. ACV coverage will reimburse the renter for the cost of the personal property at the time of the claim, minus the deductible. It's important to account for depreciation when considering this coverage option. For example, if a stereo system were stolen from an apartment five years after the stereo was purchased, the policyholder would be reimbursed for the current value of the system. Replacement cost coverage, on the other hand, will reimburse the full value of the new stereo system after you purchase the new system and submit your receipts. While the up-front cost is greater, you are more likely to receive accurate compensation for your possessions.
Other Points of Interest Regarding Renters Insurance
When a claim is reported, the insurance company will ask the policyholder for proof of purchase for all items reported on the claim. A comprehensive list of possessions, including purchase prices, model numbers and serial numbers, will suffice. It also is a good idea to take photos or video footage of any personal possessions for documentation, making sure it is stored in a secure, off-site location. When determining how much, if any, renters insurance you should purchase, estimate the value of your personal possessions. This is the amount of insurance you will need to replace the contents of your home if everything was destroyed.
One of the smartest things you can do as a renter is to reduce the chances of needing to file a claim altogether by requesting that the property owner install an anti-theft or safety device inside the rental property.
In all cases, it is recommended to reference your current insurance policy or contact your agent when deciding whether or not to purchase renters insurance for a student away at college.
As a college student, your child may be more vulnerable to identity theft because of the availability of personal information and the way many students handle this data. Identity theft is one of the fastest growing crimes in the U.S., costing victims more than $5 billion annually. College students are more likely to be hit by identity thieves because they are generally unprepared to protect themselves when the steady stream of requests for personal information begins.
Identity Theft Insurance
Identity theft insurance cannot protect you or your student from becoming a victim of identity theft and does not cover direct monetary losses incurred as a result. Instead, identity theft insurance provides coverages for the cost of reclaiming your or your student's financial identity, such as the costs of making phone calls, making copies, mailing documents, lost wages and hiring an attorney.
Before You Buy
Check to see if your homeowners policy includes identity theft insurance and ask your insurance agent if this extends to a student living away from your primary residence. If not, you might be able to purchase a stand-alone policy from another insurer, bank or credit card company. If your student is renting an apartment, ask if their renters insurance covers identity theft or if it could be added to the policy.
The National Association of Insurance Commissioners (NAIC) has additional information and resources available to consumers regarding Insurance Considerations for Young Singles & Single Parents.