Coverage Corner

KIDS & COLLEGE: LOGIC & LANGUAGE AND FORMS & FACTS

By Bill Wilson, CPCU, ARM, AIM, AAM

I am a native of Nashville, TN, but in 1969 my parents drove me to college in Chicago, 500 miles away, dropped me off, and told me they’d see me at Christmas. And, while there were lots of “Be carefuls!” before we temporarily parted ways, I don’t remember one word ever being said about “insurance.” My guess is that, for the typical American family, very little is said, done, or even thought about with regard to “insurance” during the course of planning for college. Needless to say, this can be problematic.

In my four years in college, I never brought my 1960 pink Rambler to school with me. So, one might think that “car insurance” wasn’t an important issue. It certainly never came up in any conversations with my parents. However, I had a roommate that did have a car, and he left his car keys on his desk along with permission for me to use it, especially whenever we ran low on “liquid refreshments.” Fortunately, I never had an accident while using his car on an at least weekly basis.

Is it possible that this scenario exists in your personal lines book of business? Almost certainly. Is it likely that most of the auto policies in place for the families you insure exclude any losses arising from vehicles “furnished or available for your regular use” or words to that effect? I’ll guarantee it. Is that a risk worthy of addressing with your customers? I think so.

Did you know that ISO has a very new personal auto endorsement called Family Member Extended Non-Owned Coverage – Vehicles Furnished Or Available For Regular Use, the PP 43 31 01 23? Your non-ISO carriers may have a similar endorsement. Talk to your underwriters then to your customers with kids in college.

Another issue that often comes up is whether a kid at college needs a renter’s policy or if coverage is extended from the parents’ homeowners policy. Several years ago, someone sent me a link (youtube.com/watch?v=fSEDEQdJOdk) to a video of a fire at a New York university dormitory/apartment building that was negligently started by a student resident. We’ve all heard news accounts about tragic accidents involving college students and the inevitable lawsuits that follow.

The point I’m getting to, for both auto and non-auto exposures, is the need for adequate liability insurance. How many students insured on a renter’s policy have high liability limits? How many have a renter’s policy and an umbrella policy? How much would it cost for a renter’s policy and a good-sized umbrella policy for a kid at college?

When my son went to college, we elected to extend the coverage under our own homeowners policy, auto policy, and umbrella policy to him. This gave him $3.5 million in liability coverage for essentially no additional cost other than a slight auto insurance increase for a new garaging location.

One caveat for this approach is that many, if not most, homeowners policies have age limits and full-time enrollment requirements for kids at college in order for coverage to remain in force. ISO, and probably non-ISO carriers, have endorsements that might be indicated, one being the ISO HO 05 27 – Additional Insured – Student Away At School form which overcomes the “fulltime” requirement in the event that a student drops some courses or resides at school over the summer while not taking a full schedule of courses. ISO has other endorsements that might be appropriate as well. Again, talk to your underwriters.

Likewise, talk to your insureds. Let them know that adjustments likely need to be made to their insurance programs to better cover their kids while at college. If you want to dig deeper on this subject, visit the Big “I” Virtual University and search for “college kids.”

Bill Wilson, CPCU, ARM, AIM, AAM is the founder and CEO of InsuranceCommentary.com and the author of seven books, including “When Words Collide…Resolving Insurance Coverage and Claims Disputes.” He can be reached at Bill@InsuranceCommentary.com.

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