Tell Parents to ‘Mind The Gaps’ When Kids Head to College

Students attending college away from the residence premises (home) may begin the semester as fully protected “insureds,” but can end the semester in a protection gap without property or liability protection extending from their parents’ homeowners’ policy. Status as a “full-time” student is the key to full insurance protection.

Keep in mind that a student who lives away from the residence premises meets the defined age requirement and is considered a full-time student by the institution in question qualifies as an insured. However, if that student drops a couple of classes and falls below the institution’s definition of full-time, a potential coverage gap is created.

Property of a full-time student, if kept in a dorm room, is covered for the same causes of loss as his or her parent’s personal property. There is, however, a theft exclusion if the student was not at the location within the 60 days immediately prior to the loss.

Winter breaks would not trigger this exclusion as it is fewer than 60 days. But the exclusion can become a problem if the student leaves his personal property for the summer. If the semester ends in mid-May and the student does not return until in mid-August, theft coverage would cease around the middle of July.

Possible Solutions

These two gaps (there are other possible gaps including one when a student practices a trade at school) could be easily solved with a Contents Broad Form policy (HO 00 04, aka Renters’ policy).

Rather than depending on the student’s status as full-time, checking the calendar to find the last time the student was at his dorm or self-insuring a potential “business” exposure, simply insure the exposures on the student’s own policy with applicable endorsements.

Eligibility for an HO-4 is not limited to apartments, rental houses or other such residence facilities. Since coverage is based on the contents, it can cover the insured’s stuff and liability anywhere he or she lives — be it an apartment or a dorm room. There are many positives for this solution: the student has his or her own coverage and any claims are not made on his or her parent’s insurance.

Plus, the agent develops a relationship with the soon-to-be independent homebuyer, automobile- or business-owner

An HO-4 is so inexpensive – relative to the coverage – that many parents are willing to provide the protection once possible gaps and parental advantages are explained. And for students older than the age limits allowed in the policy language, an HO-4 is essentially required.

Agents can’t know everything that goes on in their clients’ lives, but they can notify them of gaps and gap-closers.