FLORHAM PARK—As college students head back to campus, they need more than pens, pencils and enough underwear to last until fall break.
In today’s increasingly tech savvy society, back-to-school essentials include laptops, mp3 players, cell phones, TVs and DVD players – items that are often worth thousands of dollars. According to AAA New Jersey, too many families – nearly 80 percent – send their children off to college without adequate insurance coverage.
“Don’t assume that your homeowner’s coverage will automatically cover your student’s possessions in the event of loss or damage, “ says Steve Hnath, CPCU, senior vice president of insurance services for the Florham Park-based Club. “Do your research and talk to your insurance agent to determine what coverage is needed.”
AAA New Jersey Insurance Agency’s certified agents recommend determining your child’s insurance needs before loading up the car to take them back to school. Conduct a thorough inventory of everything your child plans to take and assess the value of each item. Also, consult with your insurance agent to establish whether your existing policy will cover your child’s possessions in the event of theft or damage.
“Many insurance policies restrict coverage on items stored away from your home to 10 percent of the total coverage,” explains Hnath. “If your homeowner’s policy has a limit of $100,000 on contents, that shouldn’t be a problem, because it will cover your child’s belongings up $10,000.
“However, if your policy tops out at $25,000, then your child’s coverage will be limited to $2,500 – barely enough to replace a good laptop computer.”
Also keep in mind non-traditional housing. If your child will be living off-campus, he or she may not be protected under your homeowner’s policy. Some insurers will extend the coverage to off-campus housing as long as it’s not considered a permanent address, while other insurance companies may exclude off-campus housing altogether. In this case, you should purchase renter’s insurance, which is usually inexpensive.
According to the Independent Insurance Agents of America, nearly 70 percent of college students have cars on campus. If your child falls into this category, they might be able to remain on your policy, but a conversation with your insurance agent will determine that. Keep the following questions in mind:
• Where will the car be kept? This information could reduce or increase the premiums, depending on where they attend school.
• Is it necessary to increase the amount of insurance on the car? This depends on the type of car your child drives. If it’s a brand-new Mercedes-Benz, then the answer is probably yes. If it’s the family’s 1999 minivan, maybe not. It may not be financially wise to add collision coverage to a car that’s only worth a few thousand dollars. Instead, consider comprehensive coverage – it’s relatively inexpensive and will provide some money toward replacement if the vehicle is stolen.
• Are there any discounts? Ask your insurance agent about potential discounts, including those for good students, vehicles with enhanced safety features or multiple cars on the same policy.