Thrifty Thinking: Insurance for College Students

I recently had a chance to interview one of Kiplinger.com's editors, Kimberly Lankford, about insurance considerations if you have a college student in the family.
 
1)      What should parents think about in terms of insurance on student property when sending kids off to college?
Your homeowners insurance will generally cover students’ possessions if they live in a dorm, and it may provide coverage if they’re in an off-campus apartment, as long as their primary residence is still your home. The rules vary a lot by insurer – most require your child to be a full-time student and under age 24.
Some insurers cap the coverage at college at 10% of the possessions limit on your homeowners policy – so if you have a $200,000 policy on your home with 50% of that amount, or $100,000, for contents, your kids’ coverage at college may be limited to $10,000.
If your insurer doesn’t cover your child’s off-campus apartment, or if you’d like higher coverage limits, consider a renters insurance policy – these policies generally cost just $150 to $200 per year, and you can usually get them from the same insurer that provides your homeowners insurance. If your child has roommates (who aren’t related) each person needs to get a separate renters policy.

2)      What do parents need to consider when deciding if the college-bound young adult needs a car?
Add up the total costs of bringing the car to school before deciding whether or not it’s worthwhile – such as the cost of insurance, gas and parking, in addition to the cost of the car. If your child just needs a car occasionally, find out if there are any car-sharing programs nearby, such as Zipcar, which makes it easy to rent a car for a few hours.
 
3)      How does car insurance affect a college-bound student?
If your child already has a car and takes it with them to college, then your insurance costs will rise or fall depending on the location. But if your kid goes to college more than 100 miles away and doesn’t take a car, then contact your insurer – your premiums could drop significantly (20% is common) but your kid will still have coverage when home for the summer or vacations.
 
4)      What do parents need to know about health care for college students?
Children can usually be covered under their parents’ health insurance policy until age 26, so most families can rely on that insurance when the kid goes to college. However, if you have insurance through a regional HMO with a small network of doctors and hospitals, coverage may be limited to emergency services if your student goes to college in another state. And even if your plan allows for out-of-network care, you’ll probably have to make much larger co-payments if the network doesn’t extend to the area where the college is located. Ask your insurer for a summary of benefits for the new location, to find out how much is covered.
If no in-network providers are nearby, consider your other options. Student health plans often cost hundreds of dollars each semester, and may have exclusions or low coverage caps, or may require the student to get most health care through the student medical center. Or you may have more flexibility by getting an individual health insurance policy for the student. In most states, a healthy person in his or her early twenties can get an individual health insurance policy for $150 or less per month. You can get price quotes at eHealthInsurance.com or find out about local policies through HealthCare.gov. By buying a high-deductible policy, you can keep premiums low and still have coverage for major emergencies (and most plans must also provide some preventive-care benefits without co-payments or deductibles).