The Homeowners Policy & College Students

Each year, late summer brings a milestone for many families – sending a child off to college.  It is certainly a time of adjustment for parents and their young adults alike.  It is also a time for reviewing the new insurance exposures that arise from having college students.

Having a child in college creates a number of insurance exposures which can impact several areas of a homeowner’s policy.  A few of the more asked about exposures are addressed here:

Personal Property Taken to College
Coverage C for Personal Property applies to “personal property owned or used by an insured while it is anywhere in the world”.  As broad as this coverage is, it does refer to personal property of an “INSURED”. “INSURED” definition is those who are “residents of your household who are your relatives”.  Therefore, for a kid in college to be considered an “insured”, they must still be a “resident” of your household.  While the word “resident” is somewhat ambiguous and has many definitions, the vast majority of courts hold kids in college to be residents of mom and/or dad’s house.

Even though most kids in college are considered insured’s under mom and/or dad’s Homeowners Policy, there is a limitation on the amount of Coverage C available for the property they take with them.  The Homeowners Policy provides that only 10% of Coverage C, or $1,000, whichever is greater, applies for “personal property usually located at an insured’s residence, other than the residence primary premises”.

Liability Coverage for Kids
The insuring agreement for Liability provides coverage for bodily injury and property damage claims brought against an “insured”.  As discussed above, in most cases, kids are considered insured’s under mom and/or dad’s Homeowners Policy, and thus are protected under Coverage E – Liability and under Coverage F – Medical Payments, giving them personal liability coverage worldwide.

Premises Liability for Rented Dorm, Apartment or Rental House

While most college kids receive “insured” status for their personal liability, the Homeowners Policy has limitations on which premises are covered for liability that arises out of the premises.  Most policies contain exclusions for Claims “arising out of a premises owned by an insured, rented to an insured, or rented to others by an insured, that is not an insured location”. While a dorm room, by its nature, fits the definition of an “insured location”, to avoid any uncertainty regarding whether or not a rental house or rental apartment is considered an “insured location”, these secondary residences should be added to a Homeowners policy as insured locations.  So be sure to contact your insurance agent to make sure these locations are covered.

Liability for Damage to a Rented Dorm, Apartment or Rental House

Property coverage cannot be extended to provide coverage for damage to a rented dorm, apartment, or rental house.  As for coverage for property damage liability, there is limited coverage.  Contained within the policy is an exclusion for “property damage to property rented to, occupied or used by or in the care of the insured.  This exclusion does not apply to property damage caused by fire, smoke or explosion”.

Note:  Please be aware that every claim situation is different and every loss scenario has its own unique set of circumstances.  Coverage for a specific loss will be determined based on actual coverage purchased and is subject to all of the terms and conditions of the insurance policy that is in force at the time of loss.

This information provided to us by our friends at Standard Mutual Insurance.