The start of the school year is here. College students are moving back-to-school, and many are getting prepared for new living arrangements which may or may not require having a car on campus. With all the preparation, insurance coverage is an issue that can be over looked. Even if a student has been away to college previously, it doesn't mean that his/her insurance needs haven't changed depending upon a variety of factors.
does the student need renters insurance?
Many parents assume that if your child is a dependent then they are covered by a parent's home or renter insurance. , but it can be more complicated than that. So, the real answer is “It depends”. 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.
For example, if your student lives in on-campus housing but then moves to an off-campus apartment, you may run into issues. If the student still has a room at your home, where they have some of their stuff, and continues to have their mailing address at home, and comes home at the end of the school year, then it's relatively clearn that they are a household resident. But, what if the student still has a room at home, but is also staying at the apartment year-round, leaves their possessions at the apartment all year, and changes their legal mailing address? Once they cross into that gray area where it can be argued that they have set up their own household, 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.
The goal 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. Ask your agent for clarification and if necessary confirm coverage with your insurance carrier..
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. We recommend creating a “dorm inventory” listing all the items going to school and their estimated value. Check out some information that we've shared about creating an inventory
that includes sample forms and links to an 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. We don't want to sound harsh, but that’s how it works, so it's important that you follow those rules to ensure your student and the vehicle is covered.
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. Also, some insurance companies also offer discounts for good grades, because good grades are a way of demonstrating responsible behavior, which correlates with fewer accidents, hence the offering of a discount.
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. As the school year begins, keep these issues in mind and if anything is of concern contact us. We hope that you'll feel a bit better protected because now you know what you need to be doing to keep your insuance current with changing life circumstances..