Fall is approaching and thousands of young adults across the country will be moving away from the comforts of their parent’s home to live on their own for the first time, preparing to start their collegiate pursuits. Between figuring out classes, learning how to get along with a roommate, and balancing life away from home for the first time, hopefully there is still some thought being given to protecting their belongings and personal liability.
If the question is then broadly being asked, “does a college student really need their own renter’s insurance?” the best answer may start, “it depends”. Standard ISO policy language like those used by both IMT and Wadena homeowner lines of business will recognize students as an “insured”, provided they meet certain requirements. Specifically, they must be a student enrolled in school full-time, as defined by the school, was a resident of the household before moving out to attend school, and under the age of 26 and a relative; or 21 and in the care of the named insured or a resident relative’s care. Dissecting that language, that does mean most kids going off to live in an apartment or a dorm while they attend college are considered an insured on their parent’s homeowner policy still, which includes them for both liability and personal property coverages.
There could always be examples that fall outside of the student insured definition. Perhaps the insured’s child took just a bit longer to figure out what they wanted in life and moved out of their parent’s house after the age of 26 to go back to school, or maybe they are just out of high school but wanting to only start out with part-time hours at a school. For those that would happen to fall outside of the definition of insured, endorsement HO0527 Additional Insured – Student Living Away From The Residence Premises could be used. This option is available at an additional premium and would only apply while student is away for school and residing at the listed address in the endorsement.
Even if the student meets the definition of an insured on their parent’s homeowner policy, there could certainly be good reason to write them their own HO4 renter’s insurance policy instead. One important note is that while they are an insured and would have rights to personal property coverage under their parent’s policy, they are still subject to the policy limitation for personal property away from the residence premises which is 10% of the Coverage C limit on the policy. Depending on the parent’s Coverage C limit, that limit may or may not be sufficient and could be a good reason to write them their own renter’s insurance coverage.
Another key thing to think about is the policy deductible on the homeowner’s insurance policy. It would be common to see deductibles of $1,000 or more for many homeowners, and with a renter’s policy only considering the personal property coverage it may be preferable and affordable to elect a lower deductible.
Landlords commonly require proof of coverage and while you can complete a Certificate of Liability stating coverage is in place if they qualify for automatic coverage from their parent’s policy, a separate renter’s policy would also suffice and would allow you to list the landlord or property manager using the HO0410 Additional Interests endorsement. That endorsement will advise them directly of coverage in place and will also send notice if coverage were to later be cancelled. It is also important to note that IMT does not allow landlords to be added as Additional Insureds.
Homeowner policies will contain language limiting theft coverage for students who remain qualifying as an insured, living elsewhere while attending school. If they have not been present at their school residence any point at least 90 days immediately before a theft loss occurs, theft coverage would not be available from the parent’s homeowner policy. It may be best to make sure a student who is off-campus year-round has their own renter’s coverage, to help avoid any gap in coverage if they were to spend their summer back home with parents and leave property at their residence for school.
Perhaps one last possible motivation for electing to write a student a renter’s policy instead, is a parent or their child wishing to maintain their own independence and responsibility. Getting our own insurance is a part of growing up we all must experience at some point, so why not rip off the band-aid and learn those lessons sooner than later?
Business and personal insurance in Washington County, WI can be provided to you by R. S. Semler & Associates Insurance, Inc. After a brief consultation with us, we are able to tailor policies specific to your unique situation because we represent numerous insurance companies and have local licensed agents on staff in Hartford, WI available to help you when you need it most. You can learn more about us and insurance at www.rssemler.com or call us at 800-414-5875.