Save Some Money on Your College Student

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By Consumers Union on Tuesday, August 5th, 2008

Paying careful attention to insurance costs can save you $1,000 or more in insurance costs on your college student.

First, some auto insurers will stop charging you for a college student who attends college more than 50 or 100 miles away and doesn’t have a car at school. Of course, you have to know to ask for this treatment. Money Mom’s insurer does it like this: Every Fall when my son leaves for college, I call the insurer. They switch my son to a special status, called “non-exposed driver” which means he is still covered by my policy but I don’t pay extra for him. He keeps that status unless he is going to be home for 30 days or more. For a long holiday break, I call at the start and put him back into exposed driver status, then I have to call again when he goes back to school. The bill keeps changing but after I pay for him for the whole year they send me a prompt refund when he returns to school. These phone calls are a pain but I’m saving about $1,000 a year because car insurance for teenage sons is so expensive.

Some colleges charge for health or dental insurance but will waive that fee if you provide proof that your college student has other insurance. Money Mom saved about $100 per quarter that way on her elder son’s student dental coverage, and now is saving $440 per semester on her younger son’s health insurance (but I have to fill out a new form before the start of every semester). Since the student health plan was “secondary,” it wouldn’t have given our son much that he didn’t already have on our parents’ plan. Caution: This is only a good choice if your student has other adequate coverage, such as through a parent’s plan, which is generally available only if you have family coverage, if the student is enrolled at least half time, is unmarried, and is under a certain age such as 22 or 24. Read the fine print in your family policy before deciding if you can skip the student health insurance provided by the college — and you might want the student health for the semester or quarter just before graduation because it may cover the summer after graduation, which your family policy might or might not cover.

Don’t use this money saving tip if your college student would be without health insurance – young people get sick too, and one broken leg can set you back tens of thousands of dollars in hospital bills – so don’t try to save money on the student health insurance unless you do have other coverage for your student!

it is a tough time to be trying to pay for college. If you are paying for car insurance and your student is away from home without a car, call your insurance company and see if you can save money while your son or daughter is away. Read the student health insurance materials carefully to see if there is an opt-out for students with other insurance, and whether or not you want to pursue it.

Money Mom entries are prepared by the Consumers Union Finanicial Services Campaign Team. This Money Mom has one young adult who has graduated from college, and another who is now attending college.

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