Back to School Insurance Savings and Tips

Insurance Savings And Tips For Students Going Back To School

As the summer holidays come to an end, it's time to go back to school. Kids everywhere are starting a new year of education. The older ones have moved out to study at college or university, possibly far from your home. It's natural for parents to worry about kids in their late teens and early twenties who are leaving the nest to head back to school to enjoy their post-secondary education. Still, insurance coverage for the newly-minted adult in the family is often overlooked in the excitement of packing up, buying textbooks and decorating a dorm room.

The good news is, making sure your college-aged children have the insurance coverage necessary to see them through their first few years back to school isn't as complicated as you might think. In many cases, they are still considered a part of your household even while living outside your physical house, and the insurance coverage you, as their parents, hold will apply to them just like it did when they were living under your roof. Of course, there are a few caveats to having your back-to-school children covered under your insurance, but there are also some potential benefits in the form of savings that may apply to your family.

At this point, you may have questions about the ins and outs of ensuring that your kids heading back to school are protected with the right home, contents and auto insurance coverages. Contact the friendly brokers at Morison Insurance to get all your questions answered quickly and easily. In the meantime, here are some answers and tips about insurance for your children returning to school.

Does a Student Need Their Own Property Insurance or Tenant Insurance?

Some parents are pleasantly surprised to learn that they're not going to have to fork over the money for an entirely new insurance policy when their child leaves home and heads back to school. Most property insurance policies will extend coverage for your child's belongings while they are away attending school.

The dorm building itself will be insured by the university or organization that owns it, and while that naturally means that the organization will be the beneficiary of any insurance compensation in the event of damage or destruction to the structure or included furniture such as beds and desks, students living in the dorms are typically not responsible for covering damage caused by fires, natural disasters and so on.

That being said, the students' own belongings are their responsibility. Nowadays, that typically includes expensive equipment like laptops, cellphones, and specialized equipment needed to complete college courses. Suppose those belongings are damaged or destroyed, stolen or accidentally lost. In that case, your home insurance coverage will prompt your insurer to provide you with the funds necessary to replace them up to a certain coverage limit.

Liability coverage is also extended to them while they are away at school. This means if legal action is brought against your child because they allegedly caused third-party bodily injury or third-party property damage, your insurance company will cover costs such as attorney fees, court fees, and settlement expenses, should they be found liable.

Insurance Tip: Your entire coverage limit for contents on your insurance policy will likely not apply to losses incurred by your away-at-school child. Typically, a certain percentage, such as 10%, can be accessed for your child's replacement costs. That might not sound like much, but as students usually have much less to account for, there may be plenty for their belongings. If you're concerned that it's not enough, speak to your insurance broker about increasing the coverage limit for them specifically or the overall policy.

What Are the Conditions for a Student to Be Covered By Their Parents’ Home Insurance?

It's a relief to know that the college students in your family can still enjoy the protection of your existing homeowner's insurance policy—but what's the catch? There isn't a catch per se, but there are a few conditions that need to be met for the coverage to apply, and this is where parents tend to have many questions.

Here are some essential points to know about when you're trying to determine whether your child is eligible to be covered by your home insurance policy:

• Enrolled in Post-Secondary School: This might go without saying, but if it doesn't, your child needs to be currently enrolled at a college or university for the coverage to apply. If they move out to work or complete an apprenticeship, they will need their own insurance coverage. It's acceptable that they have a job besides their studies as long as they are enrolled in post-secondary.
• No Age Limit: Parents and students often ask for a specific age limit for the coverage to apply. Not everyone heads back to college or university after graduating high school. A gap year can quickly become several years, or your child may have had other reasons for postponing their education. Because the definition of a child can take on different contexts, remember to speak to the experts at Morison Insurance to ensure you have the right coverage.
• Moving Out Temporarily: If your child is packing up a few boxes of their most treasured possessions to bring to school and leaving the rest behind to move back into your home after their studies are complete, they are still considered part of your household. But if they're entirely moving out, or have already done so, and are no longer financially dependent on you, they need their own insurance coverage.
• Living Off-Campus: If your child lives on campus in a dorm-style accommodation, they are eligible for your home insurance coverage. Dormitories are, by nature, temporary living arrangements, and students are sometimes not even allowed to remain there during holidays. But dorm living isn't always an option, or it may not be the most palatable option for your child. If they choose to live off-campus, they can still access your contents insurance coverage for their belongings and liability coverage should they encounter expenses related to litigation and legal settlements. Since they will likely be renting a room or apartment, that may be sufficient—the owner of the property they are renting should have landlord insurance to cover the actual building. However, you must talk to your insurance broker and confirm they are still eligible for coverage while living off-campus.
• Studying Abroad: Your child isn't content to attend a local institution and has set their sights on an exciting educational adventure in another country. No problem! Your home insurance coverage, meaning contents insurance and liability insurance, will still apply to them while they study abroad. That said, you will not be able to include them on your auto insurance policy, so they'll need their own car insurance based in the country where they're attending school.

If a Claim is Made On My Child’s Behalf, Does It Affect My Insurance Claims History?

Yes, it does. Since your policy covers them, any claim made on that policy—even one that is made on your child's behalf—will be a part of your claims history. That's something worth considering because if it is necessary to make a claim, it could cause your insurance premiums to go up, and you would have to give up your claims-free discount if you currently have one. On the other hand, that was also the case while your child was living with you, so the only thing that has changed is that the risk exposure may be more significant for certain perils while your child lives away from home and studies. Suppose you're unwilling to accept the consequences of potentially increased risk exposures. In that case, we recommend your child gets their own insurance policy. This way, you keep yours clean regardless of what happens with your college-aged kid.

Should I Keep My Child Listed On My Car Insurance Policy While They Are At School?

It is a good idea to keep your child on your auto insurance policy when they head back to school. They will likely want to drive a vehicle while they're home from school on a holiday or break, and keeping them as secondary drivers on your insurance will give them the freedom to do that. The more significant benefit is that it helps them build their car insurance history. Every year that goes by, their insurance rating increases when your child is listed as a driver on an insurance policy. But that's only as long as they don't get into an accident. When they're ready to get their auto insurance policy in place, they'll have that history to fall back on and will likely get lower premiums than a brand-new driver with no insurance history.

If one of the vehicles owned by your household will be going off to school with your child, that's okay—your auto insurance policy can still cover them. However, you should make sure you let your insurance broker know that the garaging address will need to be updated, the child will be listed as the primary driver, and the vehicle will be rated for the territory where the child (and the car) will be living. You will also not be eligible for the away-at-school discount outlined below, as the vehicle will be with your college student instead of sitting around at home without being driven.

Are There Home Insurance Discounts or Auto Insurance Discounts for Student Coverage?

We mentioned potential insurance savings at the beginning of this Q&A, so you are probably ready to hear about the possible home insurance discounts you can net while your child heads back to school at a college or university. Here are a few discounts that are well worth inquiring about with your Morison Insurance broker.

Many auto insurance companies offer an away-at-school discount. You can save up to 50% of the premium you pay for your child's insurance if they attend school, live more than 100 kilometres from your home and do not take a car with them to school. The reasoning for this is that if you have a car that's being driven regularly by your high school student, and they don't take it with them to college, it will be driven a lot less frequently because they'll only be using it while they're home on holiday. Since it's just sitting around for months at a stretch, the likelihood of an accident is obviously much lower, which means your premiums could also be lower. However, most insurance companies will only offer this if your child lives more than 100 kilometres away from your home. If they live closer, the assumption is that they'll be visiting more often on weekends and such, and the car will still see fairly frequent usage.

Statistics show that students who get good grades are less likely to be involved in a car accident. That fact has prompted some insurance companies to offer a good student discount to reward young drivers with an 80% average or higher while attending school. If you've got a child who works hard to keep their grades up and focus on their studies, it makes sense to talk to your insurance broker about the possibility of a good student discount for auto insurance.

Get all the discounts you deserve! Call our brokers at Morison Insurance at 1-800-463-8074 for further information and see if you are eligible for these discounts, or find out the answers to more questions about insurance for students returning to school.