With fall approaching quickly many families are getting ready to send their children back to college. This usually includes making trips to Costco for 5 lb containers of snack foods, Target for dorm room supplies and if you are lucky a trip to Best Buy for a computer. However, one of the most overlooked actions on the back-to-college checklist is contacting your insurance agent. Not making this simple five minute phone call could cause you to miss out on some big savings or, even worse, your child may not have any coverage on their belongings while at school.
The Forgotten College Student Auto Discount
It is no myth that adding a young driver to an auto insurance policy can be expensive. According to MSN Money adding a teen driver will increase your auto insurance by an average of 156%! One of the factors driving this shocking auto insurance increase for young drivers is, not only who is driving the car but how they are using it.
This fall many families will be sending “young drivers” away to school and many of the students will not be taking cars that are insured on their parent’s auto insurance policy. For these families, the young drivers will not have regular access to that car and many insurance companies may offer a significant discount for the reduced car use by your young driver.
One thing to keep in mind is this discount usually has a distance requirement. The insurance company assumes if your child is attending college within a few miles from home, they will most likely still have regular use of that vehicle and the discount may not apply. However, other discounts like “good student” may still be available for college students that live close to home.
Are My College Student’s Belongings Covered?
The short answer is it depends. To have any coverage for liability or their belongings at school they must first qualify as an “insured” on your homeowner or renter insurance policy. According to the PA Insurance Service Office’s (ISO) homeowner insurance policy, an “insured” on a homeowner insurance policy includes a student enrolled in school who meet all the following:
1. Enrolled as a “full time” student defined by the school
2. Who was a resident of your household before moving out to attend school
3. Under the age of 24 and your relative
Thus, if a student is not enrolled full time or is over the age of 23 attending school, they may not have homeowner insurance coverage from your policy. The good news for families in this situation is that endorsement HO 05 27 “Student Living Away From the Residence Premises” may be used to extend coverage from the parent’s homeowner insurance for a student who is 24 or older.
If a student is an “insured” on the parent’s homeowner insurance policy they should have coverage for their “stuff” at school – laptops, books, TVs, ipods, ect. However, the standard ISO homeowner policy has a limitation of 10% for personal property located off the insured’s “residence premises”. This means if your homeowner insurance policy has $100,000 of personal property coverage, student(s) at college would only have $10,000 of coverage for their “stuff”.
This may sound like more than enough coverage but $10,000 can go quickly depending whether you have multiple college students or just one student with some really nice “stuff”. Again there is an ISO endorsement to provide extra coverage beyond the 10% if needed. It is HO 04 50 “Personal Property at Other Residences” endorsement and it allows you to purchase additional coverage above the 10 percent limitation found on most policies.
I always use the phrase “you don’t know what you don’t know” and for many families sending students off to college this fall they don’t know how their insurance works for this major life event. Take five minutes to ask your agent if any additional auto insurance discounts apply and how your homeowner insurance covers or doesn’t cover your college student. The answer could be a very big surprise!
Caution: Many insurance companies have their homeowner policy forms and their provision may be different than the standard ISO form I outlined above. Always consult your insurance company to verify their specific requirements for definitions of “insured” and coverages.