Majoring in Risk Reduction

Wealth managers who've readied clients for the financial burden of sending a child to an elite four-year college this fall face an arguably harder task: Helping those clients prepare for the increased risks their kids will be shouldering in the months just ahead.

Any such tutorial should emphasize how much the "Animal House" experience that many college-educated clients remember has changed--and how little it hasn't.

Fat, drunk and stupid...: Wild partying remains a campus-life constant, as does a general disregard for the property, safety and privacy of oneself and others. A mixture of alcohol, academic stress, unstructured personal time and an underdeveloped maturity level continue to make college a cauldron for behavior ranging from thoughtless to reckless. What's changed most is the extent to which campus life no longer affords escape from the real world. Take, for example, the laptops and smart phones most freshmen carry around, or their car and credit cards. These "necessities" connect students to broader risks in ways that can't be ignored.

The latest technological devices, and the social networking they promote, have greatly increased the physical and financial threats the affluent freshman faces. These technologies also increase the potential for liability for well-to-do parents. Where "Animal House" pranksters once put a horse in the dean's office, now they may create a phony Facebook page lampooning the dean's "relationship" with the school's mascot. Likewise, where a stolen student ID card once created an intra-campus administrative nightmare, the information extracted from the card today might lead to an identity theft well beyond the campus walls. And where a student once could remain relatively anonymous, Twitter and other real-time chat tools can render between-class whereabouts an open book to thieves and stalkers.

The Permanent Record
Perhaps most disturbing for parents looking to protect a family reputation--or students hoping to later trade on their name in the work world--is that evidence of youthful indiscretion can follow them, literally, for a lifetime in cyberspace. Once upon a time, a night of alcohol-induced idiocy was willfully forgotten in the day (or two!) it took to sleep off the hangover. Now, embarrassing cell phone photos and videos can be viral by dawn. In other words, there really is a "permanent record." Students should consider the high probability that a classmate may post character-impugning comments, or "tag" troublesome images of them. Families of potential victims, meanwhile, should think ahead to purchase insurance that can respond to such virtual exposure with an aggressive legal response that, at a minimum, will deter further incidents. Online services like www.ReputationDefender.com can monitor unwanted online attention on a client's child and respond. Given the open exchange of information that an academic environment encourages, parents should also consider identity-theft-remediation services that can help clean up fraudulently tarnished credit records.

Home Sweet School
A dorm, fraternity house or off-campus apartment has many of the exposures a primary residence does. If anything, threats of robbery, assault, home invasion and liability for injury that guests sustain are greater in these second homes. Safeguarding valued property with adequate insurance is a must, regardless of whether you need coverage for portable electronics that are easily stolen from an unlocked dorm room, or for a car parked blocks from campus because its freshman-owner doesn't have on-campus lot privileges. It's also important to consider how major events, such as the 9-11 attack, Hurricane Katrina, the Virginia Tech massacre or the recent swine flu outbreak, might force a student to vacate campus for a prolonged period. New insurance coverages can address tuition loss and/or housing, transportation and meal expenses created by such catastrophic incidents.

His Brother's Keeper
Even if college-bound children are model citizens, they must remember that being unduly tolerant of--or negligent in responding to--the bad actions of those around them can invite litigation. Ignorance doesn't excuse hosting a party where underage classmates are drunk and disorderly or a coed is sexually assaulted by a guest. There's no good excuse when a tipsy friend is paralyzed while driving back to campus from a party. Or consider the ramifications if your child is accused of contributing to a cruel atmosphere that causes a student to lash out violently against others. The victims and their parents may seek revenge through the courts, especially when the client is perceived as having deep pockets. Although adequate liability insurance may help to address the legal costs, it's far better to mitigate the danger upfront by encouraging a young adult to be his brother's keeper.

Jumpstarting the Conversation--Sidebar

College Prep Course
The right Web site bookmarks and safety software can be a huge help to parents trying to keep their freshman from cyber-harm. But the best efforts begin with an assessment of how mentally prepared a student is to make his or her own way in an educational environment that is likely far less safe than the one known for so long. Even if the child previously attended a boarding school, parents must remember that was typically a cloistered living situation, unlike the open environments of many colleges.

The FBI reports that 80% of crime on U.S. college campuses is property-related, with most losses involving theft. Regardless of whether a campus robbery is amateur or professional, even a modest theft can carry a high cost for the victim. A single knapsack can easily hold $1,000 worth of textbooks, plus a laptop and other devices outlining the student's identity. The lesson? Freshman must be cautioned to stay ever-alert to guard against the monetary loss associated with property theft and to prevent the inevitable disruption to one's studies that would follow.

Finally, there's some positive news for parents fretting about how much college has changed and stayed the same. Yes, technology has punched big holes in the cocoon that used to keep many real world dangers off campus (and that once permitted students to avoid any lasting adult consequence for immature acts). But e-mail, cell phones, text messaging and wireless broadband are also enabling the average freshman to maintain a lifeline to parents. The result is a thoroughly modern college experience, wherein parents can offer an attentive ear and well-timed word of advice, and therefore make the transition into adulthood a more gradual and healthy process for their child.

Andrew McElwee is executive vice president of Chubb & Son and chief operating officer of Chubb Personal Insurance. He can be reached at amcelwee@chubb.com.

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