College is an exciting time for newly graduated students. Most notably, students are living on their own for the first time. This can be a daunting new experience for parents, and it is important for them to consider all the risks of their students’ new living situation.

Dorm Living

Understand the proper coverages for traditional dorm living and how your coverages can be extended.

If a student decides to go the traditional dorm route, it is important to take note of proper coverage. Contacting an insurance agent and providing the dorm name and address so it can be added to the primary and excess liability coverage is the first step. Be sure to ask your agent about your homeowner’s policy, as some may automatically extend coverage for the child’s personal belongings while at school. It is recommended to have at least $1M of liability, with an adequate contents limit based on what they bring to school.

Home or Apartment Rentals

Knowing the financial responsibilities when co-signing a lease with your child is important.

Many parents want to help their children establish housing while they are away at school. In doing so, they may co-sign a lease with their children. While this is a generous and common offer, it is essential to consider the financial responsibilities this could bring for parents. By signing a lease, the parent would be legally responsible for the lease terms if the child or roommate(s) fail to comply.

Parents may be held responsible for any damage the child causes to the rental. Unpaid rent, early move-out, late fees and unauthorized pets or guests could result in additional fees.

Should the children decide to host a party, and someone is injured, the parents could be held liable. Serious injuries could lead to large lawsuits that could eat into personal assets, bank accounts and earnings. Along with that, the child’s social media could put the co-signer at risk if underage drinking, recreational drugs, damage or fighting is posted to their accounts.

Minimizing your Risk

While considering potential liabilities associated with college living situations, it is important to consider how to minimize your risk as a parent.

There are many ways for parents to minimize their personal liability and risk of college living situations. Reviewing the lease terms with your attorney is a helpful way to understand the conditions of your child’s lease. Consider obtaining a renters policy in your child’s name to limit liability exposure for the parent. Check local laws pertaining to student housing to ensure you know your family’s rights and obligations.

Another way to limit liability is by asking roommates and families if they have a renter policy or liability coverage. If they do not, consider recommending that they get one so that everyone is protected. Parents should communicate with each other to ensure everyone is on the same page for insurance, bills and damage prevention.

Personal Insurance Team