Each school participating in the Dewar plan fields a customized policy, with costs ranging from 1 percent to 5 percent of its tuition and fees, according to Carmen Duarte, a corporate spokeswoman for Dewar, which is part of OneBeacon Insurance Group.
For example, the cost of Bard College, a small liberal arts college in New York's Hudson Valley, for the 2011-12 year ranges from $43,600 for a returning off-campus student to $56,962 for a first-year student living on campus.
Bard's tuition refund plan charges $467 a year for an on-campus student and $362 for a nonresident, according to information on the CollegeRefund.com website. Coverage includes total reimbursement of the insured term tuition and fees for injury and sickness withdrawals and 60 percent for mental health withdrawals.
The policy coordinates with Bard's refund schedule, which ranges from 80 percent back for a withdrawal in the first week down to no refund after the fourth week. "After the college's refund policy expires, our benefits typically become the only source of refund available," Duarte says.
Like any insurance, Dewar's plans stipulate certain exceptions, including those for "war, riot, nuclear reaction, illegal drug use, and intentional self-inflicted injury or sickness," according to Duarte.
Whether your child is attending a state school or an Ivy League institution, weigh the investment -- and risks -- before deciding if tuition insurance makes sense.
"Paying for college is the second biggest investment most families will make," Suneson says. "People buy travel insurance, they buy wedding insurance -- why not protect your investment?"