It’s that time of year for high school seniors. Students diligently re-take college entry exams to ensure top scores, gather letters
of recommendation and put finishing touches on their applications, only to await the college acceptance letters that will soon be
arriving in the mailbox.
While the prospect of college can be exciting, it is also incredibly stressful for both children and parents. Students may be
looking forward to gaining freedom and responsibilities, but parents may have some anxiety about their children leaving the
nest, as they cannot always be there to protect their child from potential accidents or making poor decisions.
For wealthy families, these challenges can be even more complex and more costly. Even though the child may be out of the
house, it does not mean that liability risks are not still a concern. For parents of college-bound students, it is important to
understand the risks and take proper precautions.
While the next group of high school seniors will not be leaving home until the end of next summer, it is never too early for parents
to start thinking about liabilities. Even for those who have children that are in their first semester (or even in their last), it is also
never too late to prepare for the worst. By communicating with their agent, parents can ensure they are protected by the time
their son or daughter leaves the nest.
Considering today’s litigious environment, lawsuits can result in verdicts as high as $10 million or more, according to ACE
Private Risk Services. Families, especially high net worth (HNW) individuals, should learn how to protect their college-aged
children and their wealth. Click through the following slides for ACE Private Risk Services’ strategies for mitigating these risks.
Encourage parents to talk with their college students about dangerous situations.
This is specifically important for student drivers, who may not always drive safely. Moreover, other problems can arise if a
college student chooses to lend a vehicle to a friend and an accident occurs. Similarly, encouraging regular maintenance and
upkeep for the vehicle is also a must.
At the same time, parents should be prepared to discuss proper protocol with their student, should they be involved in an
rcheck out 5 tips for students taking a car to college.
Provide information about apps and devices that monitor driving behavior.
Some parents may be interested in devices or mobile phone applications that allow parents to catch bad driving habits.
New apps can automatically detect when a car is moving and either lock a mobile phone completely or automatically respond
to texts and calls the phone receives.
Considering how many accidents occur due to texting and driving, parents can use these apps to steer students away from
distracted or reckless driving, keeping the student (and vehicle) safe.
Encourage parents to stay connected with their child, especially on social media platforms.
According to ACE, the potential widespread distribution of social media posts and supposedly private text messages have
increased the risk of lawsuits claiming invasion of privacy and character defamation.
“At the risk of oversimplifying, parents should look for social media behavior that violates the golden rule: Don’t share or say
about others what you would not want shared or said about you. Critical, sarcastic, or other potentially harmful comments or
content can potentially become the basis for a lawsuit,” said David Spencer, senior vice president of ACE Private risk services.
“With a few errant clicks or a failure to properly manage privacy settings, private, embarrassing, critical, damaging, or false
information posted in social media can suddenly be available to a much wider audience than intended. This electronic record
on the social media platform can give the plaintiff lawyer solid evidence to prove a client’s case for invasion of privacy or
Spencer suggests that parents should stay connected with their children on social media, especially since it provides parents
with some insight regarding their child’s social interactions and “friend” groups. It allows parents to see what kind of friends or
connections their children are making, and gives them a better chance of noticing when it may be time to talk with their children
about their online behavior.
“Moreover, they need to reinforce with their kids the point that they should not just view this rule from the perspective of their
peers but also from the perspective of potential employers and graduate schools. That is, would their friend want a potential
employer to see a certain picture or video clip of them at a party or in some other situation?” said Spencer.
Make sure parents have adequate coverage to match their net worth and future income.
Parents should talk with their agents to make sure that they have adequate coverage for their financial situation, especially
if those parents are also HNW clients.
Considering students often choose to live in off-campus apartments, bring the family vehicle to school, or have expensive
electronics in their dorm rooms, it is best to be prepared for the worst-case scenario.
Selecting the maximum amount of liability coverage in the auto and homeowner policies, and supplementing that coverage with
an umbrella liability policy is relatively affordable. For HNW clients, who may be facing risks that are greater-than-average
once their son or daughter goes to college, it may be something to consider. Naming the child’s college residences on home and
umbrella liability policies can help prepare parents and students for future risks.
For more information about insurance at college, read The 5 insurance facts all college bound students need to know.