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Back-to-school college student insurance issues

Aug 18 2011

Laurie Marinelli  Personal Insurance Manager, CPCU, CIC, AAI, AIS

I love that old Staple’s ad for Back to School - “Most Wonderful Time of the Year”. Seeing the glee on dad’s face and not so much on that of his kids always made me smile. The beginning of the school year is just around the corner, and it’s just about this time that we start getting asked the question, “My son/daughter is going away to college. Does my homeowner’s policy cover their stuff at school?” Many people think it’s a straight forward issue based on if your child is a dependent, but it can be more complicated than that. So, the real answer is “It depends”.

As a parent of two daughters that lived away at college, I had to deal with this issue personally. A home policy covers personal property of any resident relative, so what you need to keep in mind is the issue “Is your child still considered a resident of your household?” Even, if you think they are, you can run into situations where they are no longer considered a legal resident even if you are still providing financial support.

One of my daughters lived on campus and then moved off campus to an apartment. She still had a room at home where she left some of her stuff, continued to have her mailing address at home, and came home at the end of the school year. So, it was very clear that she was a household resident. My other daughter was similar for a number of years, but eventually, she started staying in an apartment year round. She would leave her stuff there and changed her legal mailing address. Once she crossed into that gray area that’s when she got her own renter’s insurance policy. It’s important to be aware of when your child’s living situation or decisions can establish their legal status as no longer being a resident of your home, such as changing their mailing address. Insurance companies are usually good about providing coverage even when it’s a little gray, but when it becomes more clear that your child is legally emancipated, they need their own policy.

When it comes to students living away from home, it’s also important to note that some home insurance policies have different language that adds age or full-time status limitations. On some policies, the student living away from home must be under age 24. Once he or she hits 24, Happy Birthday…they are no longer covered. It may also be required that a student living away must be enrolled full-time, as defined by the school, to be covered by the policy. So, if a student drops a few classes, they may officially become part-time and then, no coverage.

My point here isn’t to delve into the details of policy language because every situation is different. But, these finer points are ones that parents often misunderstand. So, it’s important to read your policy and think about your situation. If you think perhaps your situation could be crossing that line of emancipation, then you need to talk to your agent. Don’t assume anything.

As for what’s protected, a home policy covers personal property of any resident relative any where in the world for the same types of disaster situations covering the home. But, when personal property is kept at another residence, i.e. a dorm or off campus apartment, the amount of coverage is generally limited to 10% of the Coverage C- personal property limit. So, if your Coverage C limit is $150,000, then you’ve got $15,000.

Generally speaking that should be enough, but these days with expensive electronics, name brand clothes, designer accessories, bikes, etc., you really need to look at what’s going to be at school. I recommend creating a “dorm inventory” listing all the items going to school and their estimated value. Our website has sample forms and a link to a great inventory iPhone App. If your child has expensive jewelry, it’s probably wise to leave it at home, but if it is going to school, then you might want to consider specifically listing any high value pieces on your home policy.

Car Insurance Concerns

The other aspect that involves kids going away to school is their car. The most common mistake is not notifying the insurance company of a “garaging” change if the student is taking a car to school. Garaging is the insurance term that means “the location/city where the car is primarily parked overnight”. Some people get confused and think it refers to a physical structure…that has nothing to do with it. It’s about whether the car is at home or somewhere else. And, it’s required to provide this notification; otherwise, you could have no coverage in an accident. I don’t want to sound harsh, but that’s how it works.

Some good news for parents (and students) is that if the student is not taking a car to school and school is over 100 miles away, you can get a discount on your auto policy. The idea here is that a student living far away doesn’t drive the car regularly, so this reduces the risk of an inexperienced driver having an accident based on the percentage of driving time.

If you already knew about all these issues, then you’d get an A+ on an exam. If you didn’t know about all of these, don’t beat yourself up…you’re not alone. These are common areas of confusion. So as you’re shopping for back-to-school, packing the car, and perhaps having your own “Most Wonderful Time of the Year” celebration. I hope you’ll be a little better protected because of something you just read.

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