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Illinois Insurance Facts
Insurance for College Students
October 2001 |
Leaving home for the first time can be an exciting experience, but many
parents and students overlook the fact that college students still need
insurance. Before leaving for college, think about your insurance needs and
make sure you have the necessary coverages before there's a trip to the
emergency room, a fire in an off-campus apartment or an auto accident.
Insurance for Your Personal Belongings
You should consider some type of coverage for personal belongings
(clothing, jewelry, electronic equipment, household furnishings, etc.) you
take to school. The amount you need will depend on your situation.
If Your Belongings Are Covered Under Your Parents' Policy
If you are a full-time student (as defined by the school), meet the
specified age requirements for students, and are a resident of your parents'
household, your personal belongings may be covered up to a preset limit
stated in your parents' homeowners policy. You should check with their
insurance agent/producer to find out about the coverage limits in the
policy. You may also want to purchase additional coverage or endorsements on
expensive items such as jewelry, electronic equipment, computers, etc.
If Your Belongings Are Not Covered Under Your Parents' Policy
If your belongings are not covered under your parents' policy due to your
age, marital status, or independent student status, and you are no longer a
resident of your parents' household, you may want to consider buying
renter's insurance. Renter's insurance covers your personal belongings and
provides liability protection for yourself and relatives living with you,
and may include medical protection if someone is injured at your residence.
A renter's policy generally provides coverage on an actual cash value
basis. Actual cash value pays replacement cost minus depreciation.
Depreciation is the decrease in your property's value due to age or wear and
tear. The company will pay you what your property was actually worth
immediately before the loss, not what it would cost you to buy that same
property new today. You may also want to purchase additional coverage or
endorsements on expensive items such as jewelry, electronic equipment,
computers, etc.
Automobile Insurance
You should consider these factors in determining your auto insurance
needs while you are in college:
Required Coverage
If you are attending school in another state, check with your insurance
company or agent to make sure you have enough coverage to comply with any
minimum insurance requirements in that state. If you get caught driving
without auto insurance in Illinois, you face a fine and suspension of your
license plates. Illinois law requires all motor vehicle owners to have the
following coverage:
-
Liability insurance - Pays for bodily injury to another person
or property damage you cause due to the negligent operation of a
vehicle. Required amounts are; $20,000 per person, $40,000
per occurrence, and $15,000 for property damage. If affordable,
higher liability limits of at least 100/300/100 are
better.
-
Uninsured motorist bodily injury (UM) - Pays for your bodily
injury caused by a hit-and-run driver or an at-fault driver who has no
liability insurance. Required amounts are $20,000 per person and
$40,000 per accident. If affordable, higher limits are available.
Note: If you purchase larger amounts of UM coverage, underinsured
motorist bodily injury coverage (UIM) is also required.
Other Coverage
- Medical payments - Covers medical and funeral expenses for you
or your passengers if injured or killed in an accident in your vehicle.
It also covers you and your family members if struck by a vehicle while
walking or riding in another vehicle. This coverage pays even if you
cause the accident.
- Physical damage - Pays for damage to your auto. You may have to
pay for part of the loss, called a deductible. Illinois law doesn't
require physical damage coverage, but your lender may. Depending on the
value of your car, you may decide the cost of physical damage coverage
is not worth the additional premium.
Vehicle Ownership
- If your parents own the vehicle - If your parent or guardian's
name is on the title of the vehicle, you can be listed under their auto
insurance policy as an additional driver, but their premium will be
higher.
- If you own the vehicle - If your name is the only name on the
title, you will need your own individual auto insurance policy. As a
young driver, you will pay higher premiums. Male drivers generally pay
more than female drivers.
Location
- Your insurer does need to be notified of a change in location of a
vehicle. Even if the vehicle will be garaged in another state, the
insurance provider needs to be notified.
Discounts
- If you attend school more than 100 miles away from home and don't have
your car there, your parents should contact their insurance agent to see
if they can save on their auto insurance.
- Many companies offer a good student discount to young drivers who
maintain a "B" average or better.
Health Insurance
Family Coverage
Check with your family's health insurance provider to see if you are
still covered while in college. Most policies only cover dependents to a
certain age, but many extend coverage to the following:
-
Unmarried children up to age 19.
-
Children who are enrolled as full-time students up to age 23 or 24.
(Check with your insurer and college to determine what is considered
"full-time" status. Generally, 12 hours is considered
full-time, but this varies.) If you get married while you are a student,
you will automatically lose your "dependent" status and should
look for other health insurance.
Review your policy or call the insurance company's customer service
number to determine how your coverage will work in a different location. For
example, if your health insurance policy requires you to use specific
doctors or hospitals, you may be "out of the network" if you
attend college in another city or state.
Some type of emergency care provision is usually included in your policy,
regardless of the network guidelines. If you are covered by an HMO and your
college is not within the service area, you will only be covered for
emergency situations. Follow up care will not be covered unless you travel
back to the service area. If you are covered by a PPO plan, and your college
is outside the preferred provider network, benefits will only be paid at the
non-preferred level contained in the policy.
COBRA
If you lose health insurance coverage and your parents' policy was
through an employer with more than 20 employees, you may be eligible for
federal COBRA coverage. For more information about COBRA, see the Department
fact sheet entitled Health Insurance Continuation Rights - COBRA.
Other Health Insurance Options
- Student health insurance - offered through the school
- Group health insurance - offered by an employer (usually you have to
work a minimum number of hours per week to be eligible for coverage)
- Individual insurance coverage
Life Insurance
The goal of life insurance is to provide a measure of financial security
for your family or loved ones after you die. If you are a young college
student with no dependents, life insurance is not as important as it will be
when you get older and are married and/or have children. For most college
students, the only reason to buy life insurance is to cover funeral expenses
and debts, if there are any. Your parents may already have a life insurance
policy on you that will cover these expenses. If not, you should be able to
purchase a term life insurance policy for a small premium.
If you are married, and/or have children or elderly parents who are
dependent on you, the need for life insurance is much greater. Still, you
should be able to purchase a term life insurance policy that will provide
benefits to pay your debts and provide your dependents with some financial
security.
After Graduation
After graduation, eligibility for insurance under your parents' policies
may change. You should review your insurance coverages (life, health, auto,
homeowners), and decide what types of coverage you may have to obtain in
your own name. For more information, see the Department of Insurance fact
sheets listed below.
For More Information
Call our Consumer Services Section at (312) 814-2427 or
our Consumer Assistance Hotline toll free at (866) 445-5364
or visit us on our website at www.state.il.us/ins
Related Topics
Health
Insurance Continuation Rights - COBRA
Health
Maintenance Organizations (HMOs)
Individual
Major Medical Insurance
Frequently
Asked Questions - Individual Accident and Health Insurance
Buying
Life Insurance
Frequently
Asked Questions - Individual Life Insurance
Shopping for
Auto Insurance
Shopping
for Homeowner's Insurance
Finding a
Reputable Insurance Company - Using Financial Rating Agencies
