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Educating your children about insurance before they leave for college

By Higginbotham on August 28 , 2019

GettyImages-graduation

Attending college is an exciting time for children. Whether it’s deciding where to go, what to major in or figuring the finances, there are a lot of decisions to think about. Before they leave the nest, here are three things to consider when it comes to having the right insurance policy.

Auto Insurance

If they’re taking their car to college, be sure to update their auto insurance policy. You’ll want to ensure they are protected if they get into an accident or experience theft. If your child is attending college out of state, make sure the insurance follows state laws.

Not taking a car? Keep them on your auto insurance policy if they plan to drive when they return home for a visit or in the event they need to borrow a friend’s car on campus.

Ask for discounts. See if your child qualifies for:

  • Good student discount
  • Distant-student discount
  • Pay in full discount
  • Safe driver discount
  • Data tracking discount

Liability

College is an amazing social and learning experience. Be sure your children understand the serious consequences of drinking and driving, buying alcohol for underage kids and the risks associated with drugs and alcohol. One poor decision could lead to a lawsuit or penalties.

Renters insurance

If your child lives off campus and owns valuable items like laptops, televisions, printers, cameras or other expensive items, invest in a renters insurance policy. Construct a full inventory of your child’s items that includes model and serial numbers. A renters insurance policy can also provide important liability coverage. If your child is living with roommates, remember each child needs his/her own policy.

If my child experiences theft, will I be fully reimbursed?

This is where the difference between actual cash value and replacement coverage comes into play. Replacement cost is very simple; it is the cost to replace your item with an item of similar quality. Replacement cost policies tend to be a bit more expensive since you are essentially getting a brand new item for one that may have otherwise depreciated.

Actual cash value is the cost to replace the item minus depreciation. So, if your child had wear and tear on an expensive electronic device, your insurance would pay the cost of the device minus the depreciation.

Need help deciding between the two? Talk to our personal insurance advisors to send your child off to college with the best foot forward.

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