College Daze...
So, recently I told you about my friend’s son, Patrick. The eighteen year old who wanted to have a graduation celebration? Well Pat is headed off for college in another state and his mother is already starting to worry. Will he get along with his roommates, will he like his classes and professors, will he get enough to eat on the meal plan they picked and a hundred other mother type worries. His dad is a little more prosaic. He wants to know if the cell phone, laptop, printer, IPod, digital camera, Xbox, flat screen TV, DVD player, clock radio, dorm fridge, microwave, technical calculator, expensive new bicycle, clothing, bedding and other essential items they are loading into a utility trailer and dragging off to the dorm are covered if there is a fire, hurricane, earthquake, theft or student riot. And can he save some money by removing Pat from the family’s auto coverage while he is away at school? The answer to each of their questions is… Maybe.
Let’s start with the move. My friends own an SUV with a trailer hitch so they are borrowing one of those small open utility trailers to load everything on. In this case, the auto policy covers the liability for a trailer, owned, borrowed or rented. It may not cover all of the damage to the trailer depending on the value. And what if your student is in an apartment where the furniture isn’t provided. If you have to rent a U-Haul to move them back and forth there is no coverage for damage to the truck and even the experts can’t agree if your personal auto policy provides liability coverage since the U-Haul isn’t a private passenger vehicle. Now what about the stuff loaded on the trailer? If someone hits them, my friends can put a claim in and the other driver’s company will replace or repair what gets damaged. But if they caused the accident? Coverage might be available from your homeowners policy, but again, the experts don’t agree so you need to check with your company for guidance. If the trailer catches fire, the items get stolen, something falls on the trailer, well then, the Homeowners policy covers those losses, minus your policy deductible. Another option is to take the policy the rental company will offer to protect their truck.
Next is the question of whether Pat’s personal property is covered at the dorm. There are three solutions to this question. First, the homeowners policy. You have coverage for your personal property. 10% of that coverage can be extended to property kept at another location where the insured resides. In this case, there is no question that Pat is an insured on his parent’s policy. But what if your student doesn’t normally reside with you, they reside with their other parent? Some policies are also limiting this coverage if your student isn’t a full time student or if they are over 24. Supposing you do have coverage under your homeowners policy with a $1000 deductible and Pat’s bike gets stolen one day and a lightning strike takes out his TV and computer a week later. Putting in several small claims can adversely affect your homeowners policy. And if just his IPod is stolen, it would be under your deductible. So a second option is to write a tenant policy for him. It would be exactly like your homeowners in coverage for the personal property and liability, but would likely have a lower deductible and losses wouldn’t affect your claims history. A tenant policy is generally $150 to $225 annually for up to $40,000 coverage. The last option would be to take out a College Student Insurance policy or Dorm policy. Sold online by specialty companies, these policies cover several types of losses the other policies don’t cover or only cover if you add them to the policy. If you drop your computer and the screen cracks, or your roommate knocks your cell phone into the bathroom sink full of water? The lowest deductible available is $25. There is a lot more to say about all three policies. Talking to your agent will help you decide what option is best for your situation.
Let’s talk about the auto questions in my next post…
