College Bound Teens: More Than Just Auto Coverage

If your teenager is driving and college bound, you may need to consider purchasing more than just automobile insurance coverage to keep him or her safe. While it’s best to speak to an NIA Personal Insurance advisor directly, here are several common insurance strategies that parents can implement to safeguard their assets, should an unforeseen event arise.

Tuition Insurance
With the annual cost of a private education expected to average $30,000 in 2005, more families are buying insurance that covers their child’s tuition if the student has to leave school unexpectedly. However, this insurance only covers the tuition if your child gets injured or become seriously ill and must leave school as a consequence. It does not cover tuition if your child withdraws from school for financial problems, bad grades, or drug or alcohol abuse. Generally, when a student withdraws because of a medical issue, the university will refund a prorated amount based on how long he or she attended classes that semester. Meanwhile, some parents are increasing their life insurance coverage to ensure their children of a full four-year education in case tragedy should strike either or both of the income providers.

Property Insurance
If your child is boarding at college, many homeowners and renters policies will provide coverage for personal property off premises. The off premises coverage is usually a percentage of the personal property limit on your policy. You may wish to check with your NIA representative to make certain that the off premises limit is sufficient to repair or replace all electronics and other items in your youngster’s dorm room or off-campus apartment. If it is not sufficient, you can purchase a separate renters policy for the dorm room or apartment at a very reasonable rate. The average cost of renter's insurance is approximately $12 a month for a $30,000 limit for personal property coverage and a $100,000 limit for liability coverage.

Automobile Insurance
Auto insurance for teens and college-aged drivers can be high for good reason: young drivers get into more accidents than adult drivers as a group. While few colleges allow freshmen living on campus to bring their cars to school, many upperclassmen have them. Here are some items to consider if your college student has a car:

  1. Students who maintain a B average or better in high school or college can receive a good student discount that may be as much as a 25% discount each year.
  2. Teens who take a driver’s training course may save 10% annually.
  3. A new car will cost more to insure than a car that is a few model years old. Consider dropping collision coverage if the vehicle is several years old and is owned without an outstanding loan. Sports cars and other high performance models will cost more to insure than a sedan.

Health Insurance
Most full-time students between the ages of 18-23 can receive insurance coverage under their parents’ health plan. Check with your NIA representative to make sure the age cutoff isn’t lower on your policy. If your health care plan doesn’t cover your teen, ask the registrar or student health services director for details on whether the college offers a health insurance plans for individual students.

For more information, call your NIA advisor directly or the NIA Personal Insurance Division at 866-642-8600.