ASK KIM

Ask Kim: Make Insurance Adjustments for College Students

(By Tim Grajek For The Washington Post)
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By Kimberly Lankford
Kiplinger's Personal Finance
Sunday, August 23, 2009

QMy daughter will start college in a few weeks. What do I need to do about insurance for her?

AYou should contact your insurer before she goes. You may need to make adjustments to protect her and her belongings while she's away -- and you could save some money, too.

-- Car insurance. If she moves 100 to 150 miles away for college and leaves the family car at home, your car insurance premiums could be trimmed by up to 30 percent. And she'll still be covered when she's home on vacation.

If she takes a family car to college, your premiums will rise or fall depending on the car and the school's location.

It's usually a good idea to keep your child on the family policy so she can benefit from any multi-car (or multi-policy) discounts, as well as any breaks you've accumulated for being a longtime customer.

This might also be a good time to shop around for a better deal. The companies that offer the best rates for empty-nesters with children at college may not offer the best deals for young families. You can find rates from many companies at InsWeb (http://www.insweb.com).

-- Renters insurance. If your daughter is living in a dorm, your homeowners insurance may cover her stuff. But ask your insurer about the rules and limitations. Some policies, for example, cap dorm-room protection to 10 percent of your total coverage for possessions. Your daughter's computer, electronics and other items could be expensive to replace, so make sure you have enough coverage.

If your daughter lives off-campus, however, you probably need to buy a renters policy, which will cover her possessions and provide liability coverage if anyone is injured in her apartment. Policies tend to be $200 to $300 a year, and buying renters insurance through the company that provides your homeowners and auto coverage could get you a discount on all of the policies.

-- Health insurance. Even though most children can stay on their parents' policies while they're full-time students, find out what coverage the policy will provide if she's moving out of town.

College health insurance policies are one alternative, but be careful. Some policies have low deductibles but also low coverage maximums -- as little as $50,000 per accident or illness, with limits of just a few thousand dollars for each kind of surgery or care.

If your daughter is healthy, she may do better to buy her own policy. Premiums for healthy people in their late teens and early 20s run as little as $50 to $100 per month in most states.

She could save even more money by buying a policy that has a high deductible -- and high coverage limits -- which will protect her against major medical expenses.

Many high-deductible policies now cover preventive care, which may be all she needs if she's healthy. And if her policy has a deductible of at least $1,150, she can open a health savings account and make a tax-deductible contribution of up to $3,000 in 2009, which she can use tax-free for medical expenses in any year.


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