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Tuesday, September 8, 2015

Animal house: 4 insurance issues that arise when kids go to college

For insureds, the Insurance Information Institute recommends creating a “dorm inventory.” Keep a list of all of the items the student will bring to school, along with their estimated value. (Shutterstock/Sean Locke Photography)
For insureds, the Insurance Information Institute recommends creating a “dorm inventory.” Keep a list of all of the items the student will bring to school, along with their estimated value.

Gone are the days of a college student loading up the family car with just a couple of boxes to take to school. Nowadays, students bring laptops, televisions, bicycles, musical instruments, cell phones and other digital devices into their new dorm rooms. And while we want to believe that Junior is incredibly responsible, the truth is, he or she is bound to forget to lock their dorm door at least once—and his or her laptop may get stolen. Or they may leave their belongings unattended in the library while they take a phone call. Or burn Easy-Mac in the microwave and set off sprinklers, causing water damage to his or her computer (true story—happened to a “friend”).
It’s time to refresh the insurance considerations that a college student—away from home—brings.
For insureds, the Insurance Information Institute recommends creating a “dorm inventory.” Keep a list of all of the items the student will bring to school, along with their estimated value. Insureds can download the free app “Know Your Stuff” app to itemize belongs.

Below and on the following pages are Homeowners’ and Auto questions that arise when a student leaves home for college. Know of any others? Add your thoughts to the comments section.
Does a Homeowners’ policy provide coverage for college students?
A parent’s Homeowners’ insurance policy does provide some coverage for a student who is away at school – but it’s limited. The ISO form HO 00 03 extends the definition of “insured” to:
A student  enrolled in school full time, as defined by the school, who was a resident of your household before moving out to attend school, provided the student is under the age of
        24 and your relative; or
        21 and in your care or the care of” your residents of your household who are relatives.
This is where insureds need to be careful. A student may have stated a term as a full-time student, but dropped a class or two over the semester. Or the student may have turned 24 years old during the semester or be in grad school—at which point coverage would no longer apply.
What type of insurance coverage is provided for college students?
Four coverages are extended to applicable college students under a Homeowners’ policy:
1. Coverage C - Personal Property. This provides coverage for personal property owned or used by an insured while it is outside of the home. However, the limit of insurance is 10% of the Coverage C limit for personal property in the Homeowners’ policy, or $1,000, whichever is greater. Note that coverage does not apply if the student’s dorm has been unoccupied for more than 60 consecutive days. If Junior leaves his belongings in his dorm room over the summer, and comes back to find his television missing, coverage would not apply.
2. Coverage E – Personal Liability. This covers the student for legal defense costs or coverage from an accident (excluding auto, boat or aircraft) that causes bodily injury or property damage.
3. Coverage F – Medical Payments. This provides for the medical expenses of others because of bodily injury occurring at the student’s dwelling.
Will the student live on or off campus?
If the child doesn’t live in college-owned housing, an insured’s Homeowners’ policy may not provide coverage. According to TrustedChoice.com, insurance issues arise depending on if the child is in a dorm, apartment or rented house. “These variables, especially for older students, can impact your current protection and dictate a need to modify your policy or purchase a new one." And find out how many roommates Junior will have—insurance companies need to know this for coverage considerations. To avoid on-again/off-again insurance issues, a separate Renters’ policy for college students may be necessary.
Will the student take a car to college?
If so, does the parent (insured) own it or is the car in the student’s name? An insurance agent must be made aware of the new garaging address—if the student attends college in a less populous area, it may save the insured money. Agents should discuss with their clients how coverage is affected by change of address and ensure that minimum auto liability is met—particularly when a student attends college out of state.
If the student is not taking a car to school, it may not be the best choice to remove the child from an existing Auto policy to reduce cost. Keeping the child listed on the Auto policy ensures coverage during school breaks and while he or she drives a friend’s car at school. 
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Bob Lancaster Insurance
Serving Florida since 1964

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