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SCC News

SCC Offers Insurance Tips for Students Heading to College

JUL 23, 2021

RICHMOND – After anywhere from months to more than a year of virtual learning due to the COVID-19 pandemic, many students will soon be heading to college campuses for in-person instruction during the fall semester. In addition to new courses, teachers, friends, surroundings and living accommodations, it also can mean new insurance needs.

The State Corporation Commission’s Bureau of Insurance encourages Virginians to make sure their back-to-school checklist includes a thorough review of their own and their student’s insurance needs. “Know before they go what your student’s insurance needs will be and make sure they have the right coverage,” said Virginia Insurance Commissioner Scott A. White. “Protect yourself and your family by reviewing insurance coverage for your student’s health, auto, living space and belongings and make sure they understand the coverage.”

The Bureau offers the following insurance considerations for parents and students:

HEALTH

College students have several options for getting health insurance. Under the federal Affordable Care Act (ACA), students may stay on their parents’ health insurance until age 26. If your student remains on your health insurance policy, make sure he or she has a copy of all insurance cards and understands what services are covered and how to obtain referrals, if necessary, before seeking treatment. Under some health insurance policies, your student would need to find a physician or hospital within the carrier’s provider network – except for emergency care – or pay more out of pocket.

Students who do not have health insurance through a parent's policy, or who have limited coverage due to provider networks or service areas, may opt to purchase a student health insurance plan through their college or university. Students also can apply for a private health insurance plan through the health insurance marketplace at HealthCare.gov. Students may qualify for a Special Enrollment Period for health insurance at HealthCare.gov.

HOME

College students often take many valuable items with them to school including computers, printers, televisions, bicycles and mobile phones. Consider how much it would cost to replace everything in your student’s dorm or apartment should a theft or disaster occur.

For students who live in on-campus student housing, their parents’ homeowners or renters policy may cover their belongings if they are stolen or damaged. However, there may be limits to the amount of coverage provided for such items. Some items such as jewelry or expensive electronics may require special coverage. In the event of a loss, policy deductibles may also apply.

Students living off-campus should consider renters insurance, an inexpensive form of coverage that protects personal property and insures the tenant in case someone is injured while on their leased premises. Landlords’ policies generally only cover the structure, not the possessions of renters. Renters insurance premiums vary depending on the location and size of the rental unit and the value of your possessions.

Encourage your student that, no matter where he or she lives, it’s important to make a list of his or her belongings. An inventory will help you and your student determine how much insurance is needed and, if a loss occurs, the inventory can be used to file a claim. The National Association of Insurance Commissioners offers a free smartphone app that makes creating an inventory easy. Parents may also want to use this opportunity to update their own home inventory as well.

AUTO

For students planning to take a car to school, parents should ask their insurance agent or company about coverage availability and rates for the city and state where the college is located before deciding whether to keep the student’s car on the family policy. Also, make sure you know that state’s minimum requirements for auto insurance coverage. Students who maintain good grades may be eligible for a good student discount on the vehicle’s insurance premium.

Students whose names are on the title for a car must purchase their own policy. However, they may be able to stay on their parents' policy if their parents own the vehicle they will use at school. Let your insurance agent know where the vehicle will be stored if the address is different from what is on the policy.

The Bureau of Insurance encourages parents and students to shop around and compare policy provisions and premiums. Read any insurance policy carefully and make sure you understand exactly what is covered, exclusions, deductibles and limits. If you have questions or concerns, contact your insurance agent or company.

For more information, contact the Bureau of Insurance toll-free at 1-877-310-6560 or in Richmond at 804-371-9741 or visit its website at scc.virginia.gov/pages/Insurance.

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Contact: Katha Treanor, 804-371-9141

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SCC Encourages Investors in Virginia to Understand Costs and Fees for Mutual Funds and Exchange Traded Funds

JUN 30, 2021

RICHMOND – Mutual funds and exchange traded funds (ETFs) are popular options for many investors who are saving for retirement and other financial goals. They often offer a cost-efficient way to invest in professionally managed portfolios of securities. As with any investment, however, investors should understand their benefits, risks and costs.

When comparing funds, investors should review each fund’s prospectus, shareholder reports and portfolio holdings and evaluate their overall risk/return profiles. Expense ratios also are an important consideration when reviewing funds since, over time, they may reduce a fund’s earnings. Investors can find a fund’s expense ratio on the brokerage company’s website, by searching for the fund’s ticker symbol or in the fund’s prospectus (under Shareholder Fees).

An expense ratio is a fund’s total annual operating expenses expressed as a percentage of its assets. For instance, a one percent expense ratio means that for every $1,000 you have invested, you'll pay $10 in expenses per year.

Mutual funds and ETFs charge shareholders an expense ratio – which is how they pass on a fund’s operating costs to their shareholders on an ongoing basis. The expense ratio reflects all recurring fees a fund charges, such as management fees, administrative fees and distribution or service fees.

Since operating expenses are deducted from a fund’s assets, the return to investors is reduced. Thus, investors should be aware of how operating expenses could impact their investment for any particular fund.

In addition to expense ratios, investors may pay other fees depending on which fund type they choose. Investors may also pay brokerage fees or fees to purchase or redeem shares of a fund (sales load). These are separate from the expense ratio.

Ron Thomas, director of the State Corporation Commission’s (SCC) Division of Securities and Retail Franchising, encourages investors in Virginia to always consider the total fees and expenses they will be charged in connection with any investment. “When investing, remember that all fees and expenses you pay reduce the return on your investment,” he said. “Make sure you consider a fund’s expense ratio as well as sales loads and any other fees when evaluating the overall cost of investing in that fund. Even small differences in fees and expenses can mean a big difference in your returns over time,” he said. 

Thomas encourages Virginians to understand the basics of mutual funds and ETFs before investing in them, noting, however, that questions and inquiries regarding fees associated with mutual funds and ETFs should be directed to the United States Securities and Exchange Commission (SEC) as the SEC has authority over such matters. Still, as with any type of investment, he reminds investors to protect themselves financially by defining their objectives when investing, balancing risk versus reward, researching details about an investment, understanding all costs associated with buying, owning and selling that investment, and regularly monitoring their investments.

To learn more about expense ratios, visit the North American Securities Administrators website. For additional resources regarding securities and investing, or to find out if an investment or the person offering it are properly licensed or registered in Virginia, contact the Division of Securities and Retail Franchising in Richmond at 804-371-9051 or toll-free at 1-800-552-7945, or visit its website at scc.virginia.gov/pages/Consumer-Investments.

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Contact: Katha Treanor, 804-371-9141

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