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Does my college student need renters insurance?

8/24/2016

 
Yes, sometimes they do.

Even though many parents in Napa and Sonoma have homeowners policies that extend some coverage to their college students away from home, there can be gaps in coverage.

Let’s follow the story of “Dan” to see how.
 
Dormitory Dan
Dan is driving to the “University of Somewhere Far From Home” for his senior year of college.

Dan has an expensive bike ($1,500), a Mac Pro laptop ($3,000), the engagement ring ($5,000) that he bought for “Jennifer” (he met her at college and shhhh, don’t tell her because it’s a surprise!), a high end stereo system, and a couple of suitcases full of designer clothes, including his $175 Nikes.

Dan has a lot of stuff, even though he doesn’t stop to think about it.

The good news is that Dan’s parents have a homeowners policy that extends some coverage to Dan while he lives in the dorm. Plus, they remembered to tell the insurance company about the expensive laptop and the ring. They “scheduled” coverage for these.

Mom and Dad have $150,000 of contents coverage on their policy. Like most policies, since Dan is still young enough, he gets 10% of Mom and Dad’s contents coverage extended to him under the “off-premises” provision while he’s a dorm student.

That means Dan is covered (after a deductible) for up to $15,000 in the event of a loss of his things.
When you add up the replacement cost of his possessions, Dan is probably ok at claim time.
 
Dan moves off campus
Dan decides to save money second semester by moving off campus with a couple of buddies (after all, that engagement ring was expensive).

Suddenly, Dan is not ok. He has an insurance problem. His parent’s policy will not cover him if he lives off campus.
Dan needs his own renters policy.

The good news is that it’s very affordable to get a policy on his own- usually less than $20/month.
 
Dan’s “Dorm Insurance” Disaster
Dan didn’t like the price of renters insurance.

He heard about a thing called “dorm insurance” and he heard that it was less expensive and had a lower deductible. It would even cover him off-campus. So he bought one of these policies.

Dan missed the fine print.
  • His bike has a $1,000 limit. (Not enough.)
  • His engagement ring has a $1,000 limit. (Not nearly enough.)
  • He has no personal liability coverage. (Not safe.)
Then Dan accidentally left his laptop in his car with the window slightly cracked. Someone easily stole his beloved Mac Pro. 

Claim denied.

Why?

Dan’s lower-cost “dorm insurance” had an exclusion that would not pay for the loss if the car had a window even slightly rolled down.

Ouch.
 
My advice:
  1. Don’t assume that your “Dan” is covered by your policy. Ask.
  2. Tell your agent about all expensive items that your college student owns.
  3. Tell your agent about any changes in housing before your college student moves.
Each college situation is different. Contact your local agent for a consultation so there are no surprises.
​
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Bruce Sackrison is an insurance property and casualty broker affiliated with Professional Insurance Associates helping clients with insurance needs for personal, commercial and business insurance. Bruce can be reached at 707-931-0186, bruces@sackifs.com

Personal auto policy and business use

8/10/2016

 
Will My Personal Auto Policy Cover Business Use?

Yes, it will… USUALLY.

Incidental business use of your private passenger auto, pickup or van is often (but not always) covered under most standard auto insurance policies.

But not all situations are the same. So let’s talk about some common scenarios, and then I’ll offer some general advice. (No guarantee of coverage is implied.)
 
Sally, the Realtor.
Sally (a fictional Sally), is a local realtor in Napa. She has a sedan that she uses primarily for personal use, like running errands and commuting to her office. She also occasionally drives prospective home buyers to look at houses for sale.
A personal auto policy may be right for her.
Accountants, consultants, and part-time salespeople often fall into this category.
 
Paul, the Drywall Contractor.
Paul (a fictional Paul), is a self-employed drywall contractor in Sonoma. He has a panel van that is specially equipped to carry drywall and his tools. He uses his van primarily to conduct his business. He also runs personal errands with his van. In a sense, Paul’s van is his business.
A personal auto policy is probably not right for him.
Many tradespeople and small business owners fall into this category.
 
When do you need a “commercial” auto policy?
You may need a business auto policy if any of the following apply:
  • You use your vehicle primarily for business.
  • You have employees who use your vehicle for work.
  • Your vehicle is registered in your business name.
  • Your vehicle is specially equipped for a trade (racks, hydraulic lifts, etc).
  • You use your vehicle for any paid deliveries (pizza, newspapers, etc).
  • You use your vehicle as a messenger service.
  • You provide ridesharing as a paid service (like Uber).
 
Another consideration:
If you own a business, you should still consider a commercial auto policy for added liability protection… even if your personal vehicle can be covered by a personal auto insurance policy.

Why?

Because commercial limits are generally higher- often a lot higher- and you may need that.
Imagine this: You’re running late to a meeting with an important client. You’re on a business call, and you get distracted. You cause a major accident where others are injured.

You get sued. Your personal auto policy pays out to its limits. Then the victims go after your company’s assets. After all, you were on company time doing company business when you caused their injuries. This is a situation where the higher limits of a commercial auto policy could possibly save you and your company from bankruptcy.
 
My advice:
First, pull out your auto policy and read the exclusions section. Read it slowly, and highlight anything you don’t fully understand.

Next, talk to your agent and explain how you use your vehicle. Don’t leave out anything. Omitting something because you think it might “cause a problem” is a bad idea.
​
Finally, if you are self-employed, you should review your policy with your agent every year. As a business owner, you need to make sure you and your business are properly protected.
​
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Bruce Sackrison is an insurance property and casualty broker affiliated with Professional Insurance Associates helping clients with insurance needs for personal, commercial and business insurance. Bruce can be reached at 707-931-0186, bruces@sackifs.com
    Picture

    Bruce Sackrison

    Napa, California
    (888) 332-6609

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ADDRESS
1370 Trancas St, Ste 401
Napa, CA 94558


PHONE
(707) 931-0186
Toll Free: (888) 332-6609


CA State License #0B56437​
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