Student finance customers should consider insurance impact on parents

Fri, 05 Aug 2011

Young people planning their student finance ahead of the academic year might be interested in the latest comments from CashQuestions.com.

The online resources suggested that living away from home but relying on parents' insurance might be a false economy.

Director Annie Shaw explained that while using mum and dad's insurance might save students cash on policy payments, a claim could push the premium up.

With the insurance stretched to cover two addresses, the chances of a claim are increased and this could lead to significantly higher payments if something goes wrong.

"If [your parents] live in a nice big house that has got quite expensive insurance and then a claim is made on your little poky flat in your university town, that rise in the cost of insurance on the parents house will be disproportionate," Ms Shaw said.

"That is something to consider - see if you can manage on your parent's policy, but not necessarily [use your parents' insurance] as it could work out to be a false economy."
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