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Insurance: What College Students Need

In just a few weeks, college students across the country will start heading back to school. While most parents are focused on paying tuition bills and outfitting dorm rooms, this is also the time to think about insurance needs.

I recently chatted with June Walbert, a certified financial planner with USAA. I wanted to know how a family's insurance needs change as a child heads off to college. The good news is that most kids can stay on their parents' health insurance until age 26, so you don't have to worry too much about that.

What you should think about is your homeowners and auto insurance. Why? if your kid has a lot of electronic toys, you may want to add some protection against the perils of dorm life. On the car front, you may have an opportunity to save some money on your premiums.

Here's the advice Walbert gives her clients:

Protect Your Laptop
The typical college student has a lot of expensive belongings that would cost a pretty penny to replace if lost or stolen. The solution: Purchase renters insurance for just $15 to $30 a month and you can protect that laptop, iPad and smart phone. While a family's main homeowner's policy would technically cover these items, the deductible is probably high enough that you would still end up paying out of pocket to replace these items, says Walbert.

Tip: An easy way to keep a list of all your belonging is to use Knowyourstuff.org, the Insurance Information Institute's free inventory software.

Hit the Books
We all know insurance companies charge young people higher auto insurance rates since they tend to get into more accidents than older and more experienced drivers. One way for students to lower their hefty premiums is to get good grades. Those with an A or B average typically qualify for a 5% to 10% discount, says Walbert.

Update Your Auto Insurance
Pick up the phone and call your insurance agent if Junior is heading off to a school that's more than 100 miles away. Why? Mom and dad can usually lower their insurance premium if they can prove that their child isn't a primary driver on their cars, says Walbert.

Have you thought about your college student's insurance needs?

Stacey Bradford is the author of The Wall Street Journal Financial Guidebook for New Parents.
Columbia University image courtesy of Flickr, CC 2.0.
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