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Insurance for college students: Do you have the right coverage?

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As a college student, life might feel all about exams, friends, your next chemistry assignment, and whether you have the "right" outfit to go out on Saturday night. The thing is, it's time to stick at least one tiny toe into the adult world, and that includes doing some adult things like getting the right insurance.

The most important part of tackling what you need for college involves not sticking your head in the sand. You need to find out which types of insurance fit your situation.

Do you have the right insurance for your needs? Let's find out.

Renters insurance for college students

If you rent an apartment, townhouse, home, or another type of rental property, you need renters insurance — no ifs, ands, or buts about it.

What it is

Renters insurance, often called tenants' insurance, provides some of the benefits of homeowners insurance but does not include coverage for the structure of your building. You want renters insurance because your landlord's property insurance doesn't cover your belongings.

Renters insurance protects your belongings — things like your computer, your furniture, TV, and other expensive (and inexpensive) items. It does not, however, cover items like your car.

Why you need it

Renters insurance allows you to replace property after loss when damage or theft occurs. It can also provide coverage for an accident if someone slips and falls at your rental. Policies usually don't cost very much — in fact, the average renter's insurance policy costs $14.90 per month, or $179 per year, according to the Insurance Information Institute. (If you can afford to order a pizza, you can afford renters insurance.)

Health insurance for college students

You want to make sure you have health insurance, particularly if you sustain a serious injury or medical illness. You can end up on the line for millions of dollars if something goes awry and you don't have health insurance.

What it is

Health insurance offers coverage that pays for medical, surgical, prescription drug, and sometimes dental expenses. Health insurance can reimburse the insured for expenses incurred from illness or injury or will pay the care provider directly.

Why you need it

Thanks to the Affordable Care Act, you can stay on your parents' health plan until age 26. However, what happens if you attend school out of state and can't find any local in-network providers? You may need to get your own insurance policy to cover your needs.

Fortunately, most universities offer cheaper health insurance plans compared to traditional coverage, and students can use student loans to help cover the premiums if necessary.

You may also want to look for coverage through the health insurance marketplace or get subsidized coverage, especially if your parents can no longer claim you as a dependent on your tax forms. In some states, you can also tap into Medicaid options.

Car insurance for college students

Nearly half of college students bring a car to campus. An average of 46.8 percent of students had a car on their campus during the 2016-2017 school year, according to U.S. News and World Report. Whether you live off-campus or just want a car around for convenience, you need auto insurance.

What it is

You can remain on your family's existing auto policy. However, let your insurance company know if you go out of state for school because the rate and amount of coverage may need to change.

You need an auto insurance policy even if you just drive to Walmart every now and again. Also, you might want to explore alternatives, particularly if you don't plan to use the car that often and if you can walk to the grocery store. Parking can cost a lot on campus and you might also need to pay for a parking pass in the city where you go to college.

You can ask your insurance carrier for a lower rate if you decide not to take your car to school.

Why you need it

You could be on the hook for fines, license suspension, and auto impound if you don't have insurance. You could face worse penalties if you continually fail to get pulled over without auto insurance.

Note that you can become eligible for a good student discount for maintaining at least a B average, so make sure your college student keeps his grades up to keep costs down.

Life insurance for college students

Most college students haven't thought about life insurance, but if you have student loans, you might want to get started. Life insurance can make a lot of sense when you spend time in this expensive phase of life.

What it is

Life insurance involves a contract between you, the insurance policyholder, and the insurer. Your designated beneficiary receives a sum of money if you die.

A term life insurance policy can help cover you for a specific time period and offers the cheapest option.

Why you need it

Nobody likes to think about death (especially when you might only be 20 years old), but know that most private student loan companies won’t discharge the remaining student debt balance if you die unexpectedly. That means your loved ones get stuck paying for your loans.

Learn More: Life Insurance for Young Adults

Disability insurance for college students

You never want to think you could get so injured that you can't work — particularly if you haven't even started working in your career. However, individual disability insurance still makes sense for some students.

Technically, you have to work full-time to qualify for and purchase an individual disability insurance policy. So if you fall into either of these two categories, you might want to consider getting disability insurance today:

  • You work full-time to pay for school, whether as a traditional or non-traditional student.
  • You are a medical resident or fellow in training. (Learn more about disability insurance for physicians.)

If you don't fall into either of these categories, just hang tight. You can and should get covered to protect your income as soon as you begin working full-time.

What it is

Disability insurance replaces a portion of your monthly income if injury or illness prevents you from working. It provides financial security for you and any loved ones who may depend on your most valuable asset — your ability to earn a paycheck. You may also hear disability insurance referred to as disability income insurance or income protection.

Why you need it

Disability insurance isn't just for warding off old age and freak accidents. Incredibly, more than 25 percent of today's 20-year-olds will experience a disabling event that prevents them from working for at least three months before retirement. The common causes include:

  • Back pain
  • Cancer
  • Depression
  • Diabetes

You probably know people that suffer from these types of disabling conditions. Some may even be your peers. Don't get caught off-guard.

Breeze makes it quick & easy to buy disability insurance online. Get started here!

Identity theft insurance for college students

Identity theft insurance covers some of the costs related to identity theft.

What it is

Identity theft insurance reimburses victims for money they spend on reclaiming their financial identities and repairing their credit reports when their identity gets stolen. Identity theft policies often provide specialists who can help guide victims through the identity restoration process.

Why you need it

An identity theft insurance policy can reimburse you for some of the expenses you expend trying to restore your identity and repair your credit, such as:

  • Credit reports
  • Long-distance phone calls
  • Lost wages
  • Notary fees
  • Legal fees
  • Credit monitoring services

Note that identity theft insurance does not cover direct financial losses you may incur as a result of identity theft. It only reimburses some of the expenses that happen after identity theft occurs.

Do you have the right insurance?

You need to make sure you cover yourself in so many ways when you're in college, from making sure you have the right books to making sure you get to class on time. College offers a great step on the threshold to adulthood and independence. Why not start by getting the right insurance?

The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.

— Published April 13, 2021
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