College Students: What You Should Know about Renters and Auto Insurance

For example, you may run into issues if your student lives in on-campus housing but then moves to an off-campus apartment.  If the student still has a room at your home, where they have some of their stuff, continue to have their mailing address at home and come home at the end of the school year, then it’s relatively straightforward that they are a household resident. But what if the student has a room at home but stays at the apartment year-round, leaves their possessions all year, and changes their legal mailing address?  Once they cross into that gray area where it can be argued that they have set up their household, that’s when they need their own renters insurance policy. It’s essential to be aware of when your child’s living situation or decisions can establish their legal status as no longer a resident of your home, i.e., changing their mailing address. Insurance companies are usually good about providing coverage, even when it’s a bit gray. Still, when it becomes more apparent that your child is legally emancipated, you need to make sure they secure their own policy.

For students living away from home, it’s also important to note that some home insurance policies have different language that adds age or full-time status limitations. On some policies, the student living away from home must be under the age of 24. Once they hit 24, Happy Birthday…they are no longer covered. It may also be required that a student living away must be enrolled full-time, as defined by the school, to be covered by the policy. So, if a student drops a few classes, they may officially become part-time and have no coverage.

The goal here isn’t to delve into the details of policy language because every situation is different. But, these finer points are ones that parents often misunderstand. So, reading your policy and thinking about your situation is essential. If your situation could be crossing that line of emancipation, you need to talk to your agent. Don’t assume anything.  Ask your agent for clarification and, if necessary, confirm coverage with your insurance carrier.

As for what’s protected, a home policy covers the personal property of any resident relative anywhere in the world for the same types of disaster situations that cover the home. But when personal property is kept at another residence, i.e., a dorm or off-campus apartment, coverage is generally limited to 10% of the Coverage C personal property limit. So, if your Coverage C limit is $150,000, you have $15,000.

Generally speaking, that should be enough, but with expensive electronics, name-brand clothes, designer accessories, bikes, etc., you need to look at what will be at school. We recommend creating a “dorm inventory” listing all the items going to school and their estimated value. Check out some information we’ve shared about making an inventory, including sample forms and links to an App. If your child has expensive jewelry, it’s probably wise to leave it at home, but if it is going to school, you might want to consider listing any high-value pieces on your home policy.

The other aspect that involves kids going away to school is their car. The most common mistake is not notifying the insurance company of a “garaging” change if the student takes a car to school. Garaging is the insurance term “the location/city where the car is primarily parked overnight.” Some people get confused and think it refers to a physical structure…that has nothing to do with it. It’s about whether the car is at home or somewhere else. And, you are required to provide this notification; otherwise, you could have no coverage in an accident. We don’t want to sound harsh, but that’s how it works, so you must follow those rules to ensure your student and the vehicle are covered.

Some good news for parents (and students) is that if the student is not taking a car to school and the school is over 100 miles away, you can get a discount on your auto insurance policy. The idea here is that a student living far away doesn’t drive a car regularly, so this reduces the risk of an inexperienced driver having an accident based on the percentage of driving time.  Also, some insurance companies offer discounts for good grades because good grades demonstrate responsible behavior, which correlates with fewer accidents, hence the discount.

If you already knew about all these issues, then you’d get an A+ on an exam. If you didn’t know about all of these, don’t beat yourself up…you’re not alone. These are common areas of confusion. As the school year begins, keep these issues in mind and if anything is of concern, please Contact Us.

We hope you’ll feel a bit better protected because now you know what you need to do to keep your insurance current with changing life circumstances.