Before you say goodbye to your son or daughter, consider that now may be the perfect time to do an insurance policy review. Here are six questions to ask yourself that can help you decide whether you have the right insurance coverage:
1. Do I have property coverage for my student’s on-campus belongings? In most states, you have some automatic coverage under your homeowners policy for the personal property your student takes to school. However, you first must be sure that your child meets the definition of an insured under the policy.
Your student must be at a temporary residence—the school dorm—and he or she must permanently reside with the policyholder when not at school. Some carriers state that the student must be full time (12 credits), under age 24, and under the financial care of the policyholder.
If your student does qualify as an insured under your policy, then most carriers offer 10 percent of your current contents coverage in the event there is a covered claim in the dorm, such as a fire, a burst water pipe, vandalism, or smoke damage. In addition, some carriers may offer an endorsement to increase your contents limit.
2. Is my student’s computer covered under the policy? Carriers often take very different views on computers and laptops. Some carriers do not consider them contents, while others do. If your carrier does, your coverage probably does not include all risk coverage, which includes your child dropping, losing, or spilling liquid on a computer, or the computer shorting out during a power surge.
Most carriers will allow you to purchase a separate computer floater, which will include all risk coverage for hardware as well as software.
3. Does my policy offer theft coverage? In some states, you may need to add an off-premise theft coverage rider so that your child’s belongings are covered if they are stolen while away from the home.
On many homeowner policies, there will be no coverage if your student is away from his or her dorm room for 45 consecutive days and a theft occurs (some states and carriers have a 60 or 90 day limit). This is important to remember if your student comes home for vacation, has a sudden illness, or goes to study abroad during the semester.
4. Will my homeowners policy offer liability protection for my child while he or she is living away from home? If your child lives on campus, your homeowners policy liability will follow your child provided he or she meets the definition of an insured.
Of course, there are always exclusions. If your child is unruly and damages school property or property in his or her care, custody, or control—a rented musical instrument, for example—it may not be covered.
What if your child does not live on campus? If your student decides to rent an off-campus apartment and the lease is in either your name or your student’s name, it’s important to notify your insurance agent. If you don’t, you may be leaving yourself open for a claim that will most likely not be covered at all under your liability or property coverage. Your agent may advise you to add this location to your existing policy or even to purchase a separate renter’s policy.
Note that your policy will not cover your student’s roommates, so the roommates’ parents should contact their insurance agents as well.
5. Can I remove my student from my auto insurance? Quite often, I hear parents say, “I can finally save money by deleting my kid as a driver on our automobile policy!” Unfortunately, this is not the case, even if your student is not taking a family car to school. After all, he or she will be back, and your student may also drive someone else’s car at school. You may, however, be eligible for a discount if your child goes away to college 100 miles from home without your car. And if your student is taking a car to school, he or she may let friends drive it, which could result in an accident, so proper coverage is important.
6. Do I need a personal umbrella insurance policy? An umbrella policy is an excess liability policy that will be triggered when all other personal policy limits are exhausted. Without an umbrella policy, your home, property, and assets could be sought in the event of a claim. Having a child away from home is a good reason to contact your agent to either purchase a new policy or increase the limits on the one you have.
Keep in mind that in some cases, carriers are reluctant to issue new policies or increase limits when parents are taking their students to college, so speak to your insurance agent sooner rather than later.
Heidi Petschauer Fox graduated from St. John’s University in Queens, N.Y., in 1983 with a B.S. in management. She joined her late father’s firm, Petschauer Insurance, in 1982, became principal in 1995, and now shares ownership with her partner and cousin, Erwin Petschauer. She received her Certified Insurance Counselor (CIC) designation in 1997. She currently facilitates the professional and creative development of the entire Petschauer team and manages the personal lines and social media departments.
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