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Agents can score by making parents of college-aged students aware of new risks
New generations of college students and their parents often lack sound information about the importance of property and liability insurance for students who attend college away from home. The fact that insurance providers are rarely told that a child will be attending college-and thus are not able to offer advice-is underscored by a survey conducted by two organizations that have a substantial interest in the problem.
The Independent Insurance Agents of America, in cooperation with College Parents of America (based in Arlington, Virginia), polled 418 college students and parents relative to the need for insurance at college. Most said they didn't know or think about it. The survey also found that: At least 55% of enrollees in college live away from home during the school year; 20% live off campus and 10% own a residence; 60% of students who have cars at school own them.
In order to be able to answer questions and volunteer information, an insurance agent must know the particulars of how parents' homeowners policies might apply to the personal property and activities of a child who is away at college. Homeowners policies, in general, including those drafted by the Insurance Services Office and the American Association of Insurance Services, make provision for that type of coverage. (For purposes of illustration, the language employed in the ISO forms is cited.)
Pertinent to our review is a qualification that "the limit of liability for coverage of personal property usually located at an insured's residence, other than the residence premises shown in the declarations, is 10 percent of the limit of liability for Coverage C, or $1,000, whichever is greater. These are the coverage provisions that would establish the means for reimbursement of covered losses incurred at college residences by students who are 'insureds.'"
The word "insured," with respect to personal property coverage, is defined to include "you and residents of your household who are ... your relatives ... or other persons under the age of 21 and in the care of any person named above ..." In this context, the word "you" refers to the named insured.
It is specifically stated in current editions of ISO's forms that persons who are residents of the named insured's household and who are full-time students are "insureds." However, in order for a full-time student to qualify as an insured, he or she must be either younger than 24 and a relative, or younger than 21 and in the care of someone in the named insured's household.
Parents' homeowners policies cover personal property of an insured child while in a dormitory, fraternity or sorority house or other college residence against the same perils applicable to property in the residence described in the policy declarations. An important exception is the theft peril, which is modified for the circumstances.
Theft of property from an insured's residence other than the described residence is covered while the insured is temporarily living there. "Property of a student who is an insured is covered while at a residence away from home if the student has been there at any time during the 45 days immediately before the loss."
Students should be strongly advised not to leave their personal property carelessly exposed to theft. They should lock their rooms securely when they are going to be away for extended periods. During the summer, valuables should be removed from college quarters to which a student will not return until the fall semester. This will avoid activation of the theft coverage time restriction.
It is important to keep in mind that the valuable extension of coverage to students applies only to persons who are "insureds," by definition, under their parents' policies. They also have the benefit of homeowners personal liability, Section II coverage. There are situations where college students are not "insureds" under their parents' homeowners policies. Problems can be avoided by making proper insurance arrangements.
A married student, living away from home on campus or elsewhere, is not an "insured" under his or her parents' homeowners policy. Such a person and spouse must have their own policy for coverage of their personal property. Likewise, single students-part time or full time-who no longer live in their parents' homes but maintain separate residences need their own insurance for proper protection. And a student who is an "insured" but, for example, temporarily rents and fully furnishes property while at school should be protected by his or her own renters policy.
In light of the finding that 60% of the students who have cars at school own them, the subject of automobile insurance is a prime one for discussion. The student must carry reasonably high limits of liability insurance. Physical damage coverages depend on the circumstances, but they warrant discussion.
A family's health insurance policy should be checked to determine how age, change in dependency status or other factors might affect coverage for a student. Possible availability of protection offered by the school warrants looking into. In any event, the need for health insurance is clear.
Keeping track of children in insured families is a most efficient and highly professional way for an insurance office to make certain that clients are informed about college exposures and pertinent insurance protection. Noting the ages of children and taking the initiative in bringing the subject to the attention of insureds at the proper time will be greatly appreciated. Because the families of college-aged children must attend to many details, the matter of property insurance is likely to be overlooked.
One thing that won't be overlooked is the attention and care demonstrated by the insurance provider. Chances are extremely slim that the insured will be lured away by the siren call of insurance for fewer dollars!
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