WORCESTER, Mass., July 17, 2014 /PRNewswire/ -- Sending a child away to college is a milestone. As college students transition from teenagers to adulthood, parents would be wise to prepare for new potential risks and liabilities, and to consider the insurance implications.
"Be proud of your child's accomplishments but also be aware that having children in college raises new insurance considerations," said Mark R. Desrochers, president, personal lines insurance at The Hanover Insurance Group, Inc. (THG), a leading provider of business, auto and home insurance. "Fortunately, with careful planning, parents can minimize their liability risks and increase their peace of mind."
Desrochers said parents should turn to local independent agents to help assess their risks and to put appropriate insurance protection in place to address the new realities of college life.
The average college student will bring between $5,000 and $10,000 worth of personal property to college – ranging from technology, electronics and textbooks to clothing, furniture and bicycles. Most students will suffer a loss at least once, with the most common cause being theft and the most severe being fire and weather events.
"The property risks are much higher today. In the '80s and '90s, students didn't carry a $500 phone in their pocket and a $1,500 laptop in their backpack," Desrochers commented. "Talk with your insurance advisor about scheduling certain items of high value separately or purchase technology coverage, which often provides broader coverage and usually has a lower deductible."
Most homeowners policies classify a student's possessions as "personal property located off premises" and provide coverage for up to 10% of the home policy coverage value. Listing the student's residence as an insured location on homeowners and umbrella policies adds a level of protection.
For students living off-campus, another option is renters insurance, which often covers both property and liability coverage. Desrochers advises parents to be mindful of whether policies cover actual cash value or replacement cost. "While replacement cost coverage is slightly more expensive, it covers the actual cost to replace items rather than the depreciated value of the items and is most often the better value."
In the event of a property claim, it's important to have proof of purchase for the items reported. Take time to create a "dorm inventory" with purchase prices, model numbers and photos before packing. Consider using one of the many online applications now available, such as MyHanoverInventory, to make it easy to create, update and store a college student's inventory.
As a general rule of thumb, auto insurance follows the insured vehicle more than the driver. So if your student brings a car to college and loans the vehicle to a friend, he or she is also loaning the car's insurance. "You can end up with a claim because someone else got into an accident with your vehicle," Desrochers explains.
Liability laws also follow the car's owner, but can impact a driver as well. For this reason, it is important to keep a student covered on your auto policy even if they are not bringing a car to school. If a college student borrows a friend's car and causes an accident resulting in serious injury, both the parents of the driver and the car owner can be sued. "If you are sending a student to college with or without a car, you should talk with your insurance agent about the best option for your situation," he said.
Some insurance companies allow policyholders to put a "hold" or reduce coverage while a student is away at school – particularly if the college is more than 100 miles away.
The 18-29 year-old age bracket accounts for 24% of all identity theft complaints, according to the Federal Trade Commission. Before sending your student off to college, take time to educate him or her about the potential lasting issues created by identity theft to their credit score and ability to get credit or a job.
Several useful tips to remind students:
- Do not carry social security cards or even the social security number
- Be wary of peer-to-peer sharing programs at school that create easy, unauthorized access to a computer
- Don't share credit cards, identification cards or PIN numbers with anyone – even a friend
Some insurance products, like The Hanover Platinum Experience, now include identity protection as part of a bundle of services. Get more tips and information at http://hanoveridprotection.com/ProtectYourself.
Since most college students are considered dependents, they are covered by your home and auto policy, which also means you can be held responsible for their actions.
For example, if a student hosts a party in a dorm or apartment, you could be held responsible for a variety of tragic outcomes. An umbrella policy creates an extra buffer to protect your valuable assets, like your home. These policies can be purchased for a few hundred dollars to provide coverage for legal judgments that exceed the standard auto or homeowners policy level.
"Anytime you have a significant life changing event, like a child heading off to college, you should take time to discuss the implications with your insurance agent to review your policy limits and liability exposure," Desrochers said. "A qualified independent agent can be your most valued personal advisor."
For an independent agent in your local area, please visit the "Find an Agent" section at www.hanover.com.
ABOUT THE HANOVER
The Hanover Insurance Group, Inc., based in Worcester, Mass., is one of the top 25 property and casualty insurers in the United States. For more than 160 years, The Hanover has provided a wide range of property and casualty products and services to businesses, individuals, and families. The Hanover distributes its products through a select group of agents and brokers. Through its international member company, Chaucer, The Hanover also underwrites business at Lloyd's of London in several major insurance and reinsurance classes, including marine, property and energy. For more information, please visit hanover.com.
- Personal Finance - Career & Education
- college student