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Back to School! It’s Time to Review Your Insurance Coverage

As summer comes to a close and the new school year approaches, you and your family are remembering vacations and camp and starting to think about school supplies, classes, sports teams and the busy schedules that come with the academic year. Insurance may not be on your mind, however, the start of the school year is the perfect time to review your policies and make necessary changes. From health insurance, to car and homeowners insurance, your needs may have changed as your children head off to school or into a new life of their own. A new school, teen driver, or even a move to a college dorm could mean new insurance needs for your family. This is a good time to take a few minutes to go over your coverages and what you will need for the upcoming year.

Car Insurance

Is your teenager getting a driver’s license this year? Teens are the most expensive drivers to insure, but there are things you can do and ways to reduce the insurance cost for a teen driver.

  1. Some insurance carriers allow you to assign a specific car to a driver. This prevents your teenager, usually the most expensive driver in your household to insure, from being assigned to the most expensive car you own. You don’t want your son or daughter driving the Mercedes or BMW. You want them driving a safe, older vehicle like a Honda Civic or Toyota Corolla that is less expensive to insure or drive recklessly. If you are able to go with an insurance company that assigns a specific driver to a specific car, and your teen is driving a lower value car, you will have a better chance to save.
  2. Get an umbrella policy. If you never considered an umbrella insurance policy before, the addition of a teen driver in the family is a good time to add to your insurance protection. If you already have an umbrella, it’s time to reevaluate how much you actually need. According to the Highway for Motor Safety: “Young people ages 15-24 represent only 14% of the U.S. population. However, they account for 30% ($19 billion) of the total costs of motor vehicle injuries.” Here’s how an umbrella helps. Your son or daughter is found at fault in an accident and you are sued and settle for $1,000,000. Your auto coverage pays up to its limit, possibly $300,000. If you don’t have an umbrella, you’re responsible for the remaining $700,000. If you do have an umbrella, the umbrella policy kicks in once the auto limit has been reached and pays the remaining $700,000. The good news is an investment in umbrella insurance isn’t going to break the bank. While you do pay more than most because you have teenage drivers, $1,000,000 of insurance could be only an additional $30-40 a month for peace of mind.
  3. Take advantage of discounts available to teens. Teens are expensive to insure. But this doesn’t mean they don’t qualify for discounts. Here are the most popular discounts for teen drivers:
  • Good Grades– If your child has better than a B average or better, you may be eligible for a discount from an insurer.
  • Driver Safety Classes– Discounts and programs vary widely but some insurance companies offer discounts if your teen passes an approved driver safety course.
  • Living more than 100 miles from home– If your teen is in college more than 100 miles away without a car, let your insurer know, as most companies will give you a discount.
  • Home Insurance Bundle – The biggest discount available by far is by combining your auto and home insurance.

Homeowners Insurance

The average college student leaves home with almost $10,000 in belongings, including clothing, electronics, bicycles, musical instruments and décor, as well as computer and gaming equipment. Text books and other school supplies they purchase after arriving on campus only adds to the cost of replacing lost or damaged items. While these items were covered under your homeowners policy while they were living with you at home, it’s possible, under certain circumstances, that they may not be covered at school.

Generally, a homeowners insurance policy will cover your student’s possessions while they are away at school, if you still consider them a member of the household and they reside on campus. Limited coverage may apply to high-priced items, such as electronics and bicycles. You may need to buy additional coverage to cover these items in the event of loss or damage. It is best to make any needed changes to your policy before your student’s move, since property may be lost or damaged during the transition.

Make sure you take inventory before they leave. Make a list of all possessions with serial numbers, when possible, as well as the value of the item. Keep any available receipts with your inventory. Though it may seem daunting, an inventory and supporting documentation can ease the claim process if your student’s items are stolen or damaged.

If your student plans to live off-campus in an apartment or other rental situation, he or she will probably not be covered by your homeowners insurance and would need to acquire their own renters insurance policy. In addition to covering personal property, it also covers your child for liability, just like yours does on your homeowners policy.

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