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.
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.)
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.
- Don’t assume that your “Dan” is covered by your policy. Ask.
- Tell your agent about all expensive items that your college student owns.
- Tell your agent about any changes in housing before your college student moves.
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, firstname.lastname@example.org