Many college students enjoy health care and auto insurance coverage through their parents, along with the freedom to live without curfews or get sweet tattoos on a whim.
But all good things come to an end, and soon these students will have to build their own insurance lineups. To that end, here are some considerations to weigh when it’s time to leave the familial coverage nest.
Most health insurance companies allow children to remain on their parents’ coverage until age 26. If students can’t get coverage through an employer or spouse, they should purchase coverage on their own. If not, they may face a tax penalty.
Yes, budgets tend to be tight for students and recent grads, but purchasing life insurance now can have significant benefits. As students age, premiums can rise and emerging health issues can limit their eligibility for coverage.
Parents’ homeowners policies typically give students living on campus liability protection and some personal property protection. Off campus, students don’t enjoy the same protection. Renters insurance protects tenants’ belongings and provides liability coverage should a guest be injured in their apartment.
Students who don’t bring a car to school should remain on their parents’ policies. That way they’re covered if they come home and use a family vehicle.
If students take a car to school, parents should update the garage address with their insurance companies. Many companies allow vehicles to remain on parents’ policies if addresses are updated and vehicles remain in the same state.
Cost is one of the biggest reasons students stay on their parents’ policies. Some students remain until their mid-20s, when rates drop for some drivers, or until they can afford their own coverage.
There is no deadline for how long students can stay on their parents’ auto policy. Children can stay on their parents’ plan for as long as they’re living at home.
To learn more about AAA insurance options and to get a free quote, visit AAA.com/Insurance.