Is your college student properly insured? - MSN Money

This post comes from Brandon Ballenger at partner site Money Talks News.

Between admissions, financial aid, back-to-school shopping and moving in, it's easy for families of the college-bound to overlook something critical: insurance.

The average student loan debt in 2011 was $23,300, according to the Federal Reserve Bank of New York. The last thing students -- and their parents -- need is to add to that burden with losses from serious illness, a car wreck or stolen property.

Especially if your student is leaving home, it's not smart to assume she or he will be covered by existing policies. In the video below, Stacy Johnson breaks out the cheat sheet for College Insurance 101. Check it out, then read on for more.

Car insurance

If your student leaves a car to gather dust at home and campus is at least 100 miles away, he or she may qualify for a "distant student" discount. Call your company and ask, as well as making sure your student will remain covered as an occasional driver during visits home.

There might also be a separate discount for good grades. The rules and amounts of these discounts vary by insurer and state, but AutoInsurance.org says they could be worth 15% to 35%.

There could also be cost implications for cars on campus. For example, attending college in a state that requires higher coverage levels can raise premiums. So can moving a car from a rural setting to an urban one.

In short, when it comes to cars and college, you need to check with your insurer. If you're shopping for a car to take, a top-rated used vehicle for college students might keep the rate down. And there are lots of ways to save on car insurance that have nothing to do with college.

Health insurance

A full-time student can now be covered by a parent's health plan until age 26, regardless of residence, marital status or whether the student is financially dependent on the parent, thanks to the Patient Protection and Affordable Care Act. But if you're confined to a group or network plan, your student will still have to find a participating doctor near campus.

If you choose a separate college health plan, so-called "Obamacare" now means better coverage. According to WebMD, for the 2012-2013 school year, annual limits have been raised to at least $100,000. Previously they were as low as $1,500. By 2014-2015, annual limits will be eliminated.  Also, preventive care, including screenings and vaccinations, and birth control are now provided free of charge.

Starting in 2013, WebMD says, college plans must spend 70% of premiums on care instead of on administrative overhead or profits. (It can be as little as half that now.) An insurer not meeting that requirement will have to refund the difference.

Property insurance

Students have a lot of valuable electronics: laptops, iPads, Blu-ray players, flat-screen TVs, gaming consoles. If your student is dorm-bound, your homeowners policy likely covers his or her stuff, but you should check about policy limits.

Living off-campus in an apartment? That may call for renters insurance. The good news: It's pretty affordable, as little as $12 a month for $30,000 of property coverage and $100,000 of liability coverage.

Either way, make sure you and your student take an inventory and photograph everything so you're prepared in case you have to make a claim.

Tuition insurance

If your student can't finish a semester due to illness or injury, you're possibly out the cost of tuition, fees and housing, a princely sum if the college in question is expensive. Tuition insurance is designed to reimburse those expenses. According to The Wall Street Journal, the cost ranges from about $125 to more than $500 a year.

But, as with many forms of specialty insurance policies, these are often short on coverage and long on exclusions. For example, failure to complete a term because of a pre-existing condition, mental health issues or self-inflicted injuries is often limited or excluded. In addition, because most colleges offer prorated refunds for the first month of each semester, and students unable to complete classes near the end of a semester will likely take an incomplete rather than quit, these policies may provide value only for the middle part of a term, the Journal says.

Whether these policies are worth it or not depends on their cost, the hardship that could arise and your aversion to risk. The Journal says the number of eligible families who buy them is small.

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