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7 Overlooked Risks When Your Child Goes To College

This article is more than 8 years old.

While all parents worry about the safety of their young adult children as they head off to college, there are also financial risks that parents should consider. Christie Alderman is the Client Product and Service Manager for Chubb Personal Insurance.

Here are seven situations Christie urges you to think about and ways to help protect your family:

1. Driving (even when your kid isn't taking the car). While you may save some money in dropping your child’s name from your auto policy, you could also leave them seriously exposed to several risky situations. Young adults may find themselves behind the wheels of their friends' cars or using a car sharing service. Unfortunately, auto accidents can lead to millions of dollars in damages, and the car owner's policy may not fully respond. Talk to an independent agent to make sure your child has appropriate liability coverage.

2. Roommates.: Beyond the potential of being a bad influence, the actions of your child's roommates can get your family named in a lawsuit—even if your child isn't directly involved. Students have found themselves embroiled in multi-year lawsuits for injuries that occurred at a party held by their roommates in their rental or Greek housing. Make sure you are comfortable with all roommates (and their parents) before encouraging your child to share a pad.

3. Renting off-campus housing. While your kid may appreciate the freedom of living off campus, if anyone gets injured on the property, your child faces the potential of being named in a lawsuit. Use the time while moving in the futon and setting up the Wi-Fi to also talk to him or her about being a responsible tenant. Speak to your child about the need to clean up anything that could cause a trip-and-fall accident and to immediately request building repairs from the landlord in writing. Again, make sure your child has appropriate liability coverage.

4. Buying an off-campus house. If you decide to purchase housing for your child while he or she is away at school, remember you have new responsibilities as a landlord. Keep the property in safe condition for your child and his or her guests. Also, if you are collecting rent from roommates, talk to an independent agent about liability coverage—as some income generating activities may be excluded from your personal liability coverage.

5. Injury from parties. Sure, you've worried about the drinking that goes on at college, but you may also want to consider the liability associated with it. Students who host parties can be held liable if anyone gets injured at the party or while driving drunk. Talk to your kid ahead of time about various party scenarios and how they might handle them, including collecting keys, limiting the number of people invited and calling the police if things get out of hand.

6. Online behavior. The rise in online rating sites have made it common for young adults to voice opinions online, but sites like ratemyprofessor.com or dontdatehimgirl.com can make it easier for young adults to go too far. If online words cause the professor or ex-boyfriend harm, it can lead to a lawsuit. Coach your kids about what they shouldn't say online and make sure your liability insurance covers libel and slander.

7. Identity theft. From phishing scams, credit card skimmers, and data breaches, less experienced youths can fall victim to cyber crime. Teach your kid how to spot common scams, how to use encryption and strong passwords, and how to update anti-virus software. Many insurance companies also offer services that can pro-actively recommend ways of protecting identity and can also help resolve cases of theft.

You can reduce your children’s chances of experiencing these problems by educating them first, but make sure quality insurance is in place as a critical back-up. Most liability insurance policies have an age limit for dependents, so it is important to consult with an independent agent to make sure your child is either covered under your policy or obtains his or her own. Also, consider choosing higher liability limits. Accidents involving multiple people being seriously injured, such as an auto accident or a deck collapse, can lead to multi-million dollar claims. Insurance can help protect both your own financial nest-egg and your children’s future finances too.

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