It’s always a good idea to make sure you have enough insurance. That’s especially true during major life events like getting married, buying a house, or going to college.
Your insurance landscape changes as you reach these life milestones. Starting (or continuing) school is a great time to take a step back and assess your insurance coverage. This article covers health, auto, and home or renters insurance options for students. Whether you’re a student or the parent of one, it’s important to get educated.
Health Insurance for Students
Many universities now require students to have some form of health insurance. College students have several options for health care. In most cases, the best choice for college students is staying on their parent’s plan. Regardless, we’ll cover each option below:
1. Get a student health plan through school
First, many colleges offer subsidized health insurance for enrolled students. They’re usually called a student health plan or student health insurance. Students are often automatically enrolled into these plans by their college. If you don’t want to enroll in a student plan, you’ll need a waiver that shows you have adequate insurance.
The quality of a student health plan really depends on the student’s needs and the university. Each college has their own rules and regulations for health care, so it’s hard to recommend buying or avoiding a student plan. At the very least, you should study the plan and see how it compares to your other options. Don’t assume that a college-sponsored health plan is cheaper or more comprehensive than other insurance, though. Many student health plans are equally expensive compared to private options.
2. Stay on a parent's plan
Second, and perhaps most preferably, is staying on a parent’s plan. Thanks to Obamacare, students can now stay on their parent’s plan until they turn 26. Experts say that, in most cases, staying on a family plan is the best option for college kids.
This arrangement may get complicated when crossing state lines. If your child attends an out of state school, check with your insurance company to see how their out-of-state coverage works. Also, make sure that there are in-network providers near your kid’s college. You don’t want them looking for a local health care provider only to find that there aren’t any that accept your insurance!
3. Buy a normal policy through the health insurance marketplace
If getting insurance through your parent’s plan isn’t an option, consider buying health insurance through the marketplace. You can enroll in a marketplace plan through healtcare.gov. Marketplace plan offering really depend on what state you live in.
But you should definitely look into it. An individual plan might offer better coverage than a student plan. And independent students with low income (like many other college kids) might even qualify for Medicaid.
4. Buy a ‘catastrophic’ policy
Third, opting for an extremely inexpensive plan is feasible choice. With many health plans costing a considerable amount, it’s tempting to go the cheap route. If you’re ever going to skimp on health insurance, the best time to do it is when you’re young and healthy. Nearly 85 percent of college students rate their health as at least good.
That’s where a catastrophic insurance plan comes in. It’s a barebones insurance plan available to people under age 30. Catastrophic insurance provides coverage for individuals who can’t (or don’t want to) pay for enhanced coverage. With a yearly deductible of $7,350 and minimal primary care visits, catastrophic plans aren’t for everyone. But if you’re a healthy student with a tight budget, it might be right for you.
As the name suggests, the plan is there to protect you from an unexpected health catastrophe. It won’t cover much day-to-day care, but it’ll keep you from going bankrupt in the face of a sudden serious injury or illness.
Take advantage of your student benefits!
Students can get usually get cheap campus health care regardless of their insurance coverage. How? Most colleges have a campus health center with primary care services for reasonable prices. These visits usually come with a cheap copayment between $10 to $20.
If money is tight and you’re in good health, consider buying a catastrophic plan and relying on cheap primary care from the student health center.
Don’t forget about vaccines
State law requires that college students have certain vaccinations before attending school. Each state has their own guidelines for immunization requirements. In North Carolina, for example, students must complete these vaccinations:
- Diphtheria, tetanus, and pertussis
- Hepatitis B
If you or your child is behind on vaccines, get it done ASAP! Before you do, check to see if your insurance covers it. Most plans cover at least some vaccines.
Car Insurance for Students
Data shows that nearly half of college students bring a car to campus. If you or your kid plan to keep a car on campus, make sure your insurance is up to snuff.
Insuring a young driver is expensive
Car insurance for teenagers is, unfortunately, extremely expensive. Our data shows that teenagers pay an average of $438 per month for an individual car insurance policy! That number drops to $278 per month to add a teenager to a parent’s policy. So, if possible, stay on your parent’s plan! It’ll save you a ton of money.
And since insurance is so expensive for young people, do your part to save money. Most insurers offer good grade discounts. Some companies, like GEICO, for example, offer discounts to members of certain universities, college conferences, and student organizations.
Reassess your coverage
Heading off to college is a good time to analyze your coverage. Do you have enough? If you’re moving out of state, make sure you at least have the minimum coverage required by that state. These requirements vary between states.
While minimum coverage is enough to get you on the road, it really doesn’t provide adequate protection for you or your car. Read our article on how much insurance to buy to learn what you need beyond minimum coverage.
It’s a good idea to stay insured even if you don’t own a car
If you’re not taking a car to college but still plan on driving the family car when you’re home, try to stay on your parent’s plan. Most insurance companies (like Progressive, for example) offer a ‘distant student’ discount. They charge less to insure a student who lives at least 100 miles from home. It’s perfect for people who want coverage when they’re at their parents' house, but don’t need it for the rest of the year.
You might even want to consider buying your own policy even if you don’t have a car. Sounds weird, right? It’s not as strange as it sounds, and insurers sell a policy for this exact situation.
It’s called non-owner car insurance, and it’s helpful for several reasons:
- It covers you when you borrow your friend’s car. Relying on your friend’s insurance is risky. It might not extend full coverage to other drivers, and even it does, your friend might only have minimum coverage.
- It’ll help your insurance history. Insurance companies charge more for people with lapses in coverage. Buying a non-owner policy keeps your insurance active, which can save you money down the road.
- If you use car sharing services like Car2Go, ReachNow, and ZipCar, non-owner insurance provides extra coverage.
- It’s not too expensive. Non-owner car insurance usually costs about as much as a minimum liability plan.
What about Uber and Lyft?
College students have to get creative if they want to eat something better (and more expensive) than ramen noodles. But working a regular job while going to school is a tall task. That’s why many college students turn to Uber and Lyft to earn some cash on the side.
If you’re thinking about driving for Uber or Lyft, make sure you have rideshare insurance. A regular car insurance policy won’t cover you. And while Uber and Lyft offer some insurance protection for drivers, it comes with strict limitations.
Fortunately, rideshare insurance is widely available and very affordable. To learn more, read our ‘Car Insurance for Rideshare Drivers’ article.
Home and Renters Insurance for Students
Whether you’re living in a dorm, apartment, or a house, you’ll want to protect your stuff! Burglaries and theft are, unfortunately, all-too-common in dorms and campus housing across the country. Studies show that students suffer from nearly 15,000 on-campus burglaries every year. To put it plainly, college students need home or renters insurance.
College is expensive, and you might not have cash sitting around to replace stolen laptops, smart phones, or textbooks. So, get insurance!
Students have two options to insure their belongings. The ideal choice depends on belongings amount, and whether the student lives on or off campus.
1. Stay on the parent’s homeowners policy
Children who live on-campus can usually stay covered under their parent’s homeowners insurance policy. That’s assuming that they’re a dependent on their policy. Also, policies typically set limits for off-premises coverage. Usually, it’s set at 10 percent of the policies belongings coverage.
The extent of coverage depends on policy specifics and any limitations. Check with your insurance company before relying on a parent's policy.
2. Buy dorm insurance
Students who live on-campus may prefer dorm insurance rather than staying on their parent’s homeowners policy. According to Consumer Reports, a dorm insurance policy comes with a low deductible and cost around $10 to $15 per month. However, dorm insurance isn’t as common as renters or home insurance. Finding and buying a policy may take some legwork.
3. Buy renters insurance
If you live off-campus (like 87 percent of college students) you can’t stay on your parent’s home insurance buy dorm insurance. That leaves renters insurance as your only option. Fortunately, it’s a great option, and it’s pretty cheap!
Every college student should have renters insurance. With premiums as low as $15 a month, a policy won’t break the bank. And you’ll be glad you have it in the event of an emergency. Renters insurance comes with three main forms of coverage:
- Belongings: Your stuff is covered if it’s stolen, damaged, or destroyed by a theft or certain accidents.
- Additional living expenses: If your home is unlivable because of a covered incident, your insurer pays for temporary housing, food, and more.
- Liability: If someone gets hurt in your dorm, apartment, or house, insurance helps cover your liability.
You should know that renters insurance also covers you outside of the home. That means if your laptop is stolen from the library while you’re on a bathroom break, for example, you’re covered!
There are stipulations, however. Avoid these two common renters insurance mistakes:
- Don’t assume you’re fully covered. Policies have exclusions, limits, and stipulations. For example, policies always come with a limit for belongings coverage. But they also set limits for specific items within that belonging's coverage. So, you might have $30,000 in possessions coverage, but a $2,000 limit on electronics. If your computer, TV, and phone are all stolen or destroyed, their value may exceed that limit. So, read the fine print! That’s where an insurance rider or endorsement can help you out.
- Don’t share a policy with a roommate. Splitting groceries with your roommate is hard enough! Avoid making that mistake with a renters policy. Why? It complicates everything, including filing claims, canceling your policy, and maintaining a clean insurance record. Save yourself a potential headache and get your own policy.
To Sum it All Up
Between health, auto, and home/renters insurance, here’s a lot of stuff to think about. Here are the most important takeaways:
- It‘s almost always better to stay on a parents policy. That‘s true for health, auto, and home insurance.
- Don’t assume your student health plan is cheaper than regular health insurance.
- Take advantage of subsidized health care from the student health center!
- Don’t share a renters insurance policy with your roommate. The risk is not worth the reward.
Even if you don’t own a car, maintaining coverage is a smart idea.