Coverage gaps - College Students & Your Homeowners Policy
This is the phone call you don’t want to get from your college student…“Hi dad, all my stuff got burned up in an apartment fire….and…. I am being sued by the apartment owner because they say the fire was my fault!” Next, you find out that your Homeowners insurance policy may not provide any coverage for your college student. So, here’s what you need to know before you get that dreaded phone call.
Get answers to these 3 important questions below:
Is your student insured for Property and Liability under your Homeowners Insurance policy?
What coverage is provided by your Homeowners policy for your student?
How to remove all coverage doubt and assure the right coverage for your student?
1) Is your student insured for Property and Liability under your Homeowners Insurance policy?
A parent’s Homeowners insurance policy DOES provide some coverage for a student while away at school – BUT only limited coverage. The typical Homeowners policy (ISO form HO 00 03) extends coverage to your student as an “insured” relative only under the following circumstances:
5.b. 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 a person described in #1 above.
“Full time” enrollment and their “age” become the issues of concern. Your college student may have enrolled full time when they started the term but dropped classes and suddenly becomes part-time; or, they turn age 24 during the term – both would cause them not to be an “insured” of your policy and no coverage would apply.
2) What coverage is provided by your Homeowners policy for your student?
As long as your student continues to be an “insured” then three essential coverages are extended:
Coverage C: Personal Property – The personal property (contents) of your student is covered anywhere in the world for the same “broad named perils” as your own personal property. 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: Theft is a covered peril but the student must visit their residence at least once in a 60 day period or theft is excluded. So, the student can’t leave their personal property unattended and go home for the summer and then come back and find things stolen.
Coverage E: Personal Liability – Coverage follows an “insured” anywhere in the world up to the personal liability limit selected on the Homeowners policy. This covers the student for legal defense costs and damages from an accident (other than in an auto, boat or aircraft) that causes bodily injury or property damage for which they become legally liable.
Coverage F: Medical Payments – No fault medical payments for the medical expenses of others because of bodily injury occurring at the student’s temporary residence premises or caused by the activities of an “insured”.
3) How to remove all coverage doubt and assure the right coverage for your student?
At some point every dependent child grows up. They keep their apartment at school year-round, find a regular year-round job and they quit coming home from college in the summer – or they drop out of school and live independently - or they graduate from college and live independently. To avoid the possibility of having on-again / off-again coverage extended from your own Homeowners it might be best to get your student their own policy – a “Renters” Insurance policy.
A Renters policy (HO-4 form) is a separate policy written for your student and lists their premises as an “insured residence”. This policy provides the three essential coverages of Personal Liability, Medical Payments, and Personal Property with limits you select. The annual premium ranges from $120 to $240 for the typical policy. This becomes a fundamental and necessary coverage to protect your student’s financial future as they become more and more independent.
The content of FAQ articles are general in nature and are not intended as a substitute for professional legal, financial, or insurance counsel for individuals. Insurance coverage forms vary by issuing company and by state. For specific advice contact us.
American Insurance is an independent insurance agency with offices in Lewiston and Moscow, Idaho.