When children leave home for college, their parents want to do everything they can to make sure that they are safe and protected. One issue that they may not think about, however, is the insurance coverage necessary to protect the college student living away from home. In this issue of the E&O Report, we will review some of the coverage considerations that insurance agents and brokers should discuss with customers who have a child away at college.

The homeowner's insurance policy HO-3 form provides coverage for children who are away attending college full-time and are under the age of 24. Insurance companies consider full-time college students to be residents of their parent's home who are temporarily residing away at school, and therefore they are provided with coverage under their parent's homeowner's policy. The policy will provide coverage for personal property, personal liability and medical payments.

With regard to coverage for personal property, the policy will provide insurance coverage for the personal belongings of college students when they are living in dorms. Most homeowner's policies limit the amount of coverage for off-premises personal property to 10% of the total coverage available for personal property under the policy. Therefore, for example, if a policy provides $50,000 in total coverage for personal property, the amount of coverage available to cover the personal property in a student's dorm room would be $5,000. Since many students take expensive belongings away with them when they go away to college, the parents need to consider whether the amount of coverage that they have is adequate or if they may need to increase it.

The typical homeowner's form also provides insurance coverage for personal liability for the student under their parent's policy. This will provide coverage for the student for legal defense costs or coverage from an accident that causes bodily injury or property damage. The coverage does not provide coverage for accidents resulting from automobiles, boats, or aircraft. The typical homeowner's form will also provide coverage to the student living away at college for the medical expenses of others resulting from injuries that occur while they are at the student's dwelling.

The HO-3 form provides limited coverage for damage to property that is in the student's care, custody and control. The form states that the insurance does not apply to property damage to property rented to, occupied, or used by or in the care of the insured. This exclusion does not apply to property damage that is caused by fire, smoke or explosion. If the student causes water damage to the dorm room or an apartment, the HO-3 would not provide coverage.

 It is very common for college students to move into off-campus housing and not live in the school's dorms. This living arrangement is treated differently by insurance companies than the full-time student who lives in the dorms that are provided by the college. Students who live in off-campus housing will need to obtain their own rental insurance policies, since their parent's homeowner's policies will not cover their personal property that is located there. In this situation, all of the details of the rental need to be explored in order to ensure that the student is adequately insured, as with any rental policy that is obtained. This will include such items as the size and location of the apartment, any roommates that they may have, and the contents of the apartment.

Another issue to discuss with a customer who has a child away at college is the car they may have been driving when they were living at home. Does the parent own the car, or is it in the student's name? If the student does not take a car with them to college, and they are insured under their parent's policy, it may not be prudent to take them off the policy to reduce costs. This way the student will be covered if they are going to be using the car when they are home from school or if they drive a friend's car while they are away. If the car is in the student's name and it is not taken to college, some insurers will provide a discount if the car is over 100 miles away from the college. If, however, a car is taken to college by the student, the auto insurance company should be notified about the location where the car will be garaged whether it is titled in the name of the parents or the student. The location where the car is garaged may either increase or decrease the auto insurance premiums.

Health insurance coverage for the college student is another area that should be discussed. If a student attending college is younger than 26 years old, they would be able to maintain health insurance coverage under their parent's plan. One item to consider if the student is attending college in a different state is whether the network of preferred physicians and hospitals is available under the health insurance plan. If the network does not extend to the location where the student is attending school, the child will probably have coverage for emergency care if needed or they may have to use physicians and hospitals that are treated as out of network by the health insurer.       

An additional issue to consider is insuring against the theft of a student's laptop or other device with data and personal/school content on it. According to U.S. Department of Education, theft of personal property was the most common crime that takes place on college campuses. It only takes seconds for thieves to grab a mobile device off a table or a laptop from a library desk. So, while not giving the thieves the chance is the first line of defense, being properly insured for the device and the data is important. In addition to any personal property coverage under the homeowner's policies, you can also suggest some type of standalone Dorm/Student Personal Property policy. The latter usually protects the student and their property worldwide. Many insurers provide coverage for laptop computers and other computer devices. In New York, ISO endorsement HO 23 13 02 17 – Special Computer Coverage provides coverage for computer equipment against direct physical loss. Computer equipment is defined within the endorsement to mean computer hardware, software, operating systems or networks, and also other electronic parts, equipment or systems solely designed for use with or connected to the computer equipment  There is also the issue of insuring the consequences of both identity theft and the loss of the data on any laptop or mobile device. Loss of the data on a laptop is devastating to a student. Coverage for data recreation, cost of retrieval etc., should be discussed, as well as assuring that the limits under any homeowner's or other insurance policy are sufficient.

Raising these issues with customers who have a college student living away at school has benefits for the student, the parents and the insurance agency or brokerage. Having the student and parent think about these coverage questions will help protect them from potential insurance problems that may arise. The agency or brokerage will also benefit because it will be providing better service to its customers, and in the process, it may also sell more insurance. In addition, addressing these issues with the customer will help protect the agency or brokerage from a potential errors and omissions claim or lawsuit. 

Submitted by:
James C. Keidel, Esq.
Howard S. Kronberg, Esq.
Keidel, Weldon & Cunningham, LLP​

Keidel, Weldon & Cunningham, LLP concentrates its practice in the defense of insurance agents and broker's errors and omissions claims and litigation, errors and omissions loss control counsel and education, insurance coverage analysis and litigation and insurance regulatory matters. Please direct any comments or questions to James C. Keidel, Esq. by mail to the main office of Keidel, Weldon & Cunningham, LLP, at 925 Westchester Avenue, Suite 400, White Plains, NY 10604, telephone at (914) 948-7000 or e-mail at jkeidel@kwcllp.com. The law firm also maintains offices in Syracuse, New York; New York City, New York; Wilton, Connecticut; Fair Lawn, New Jersey; Warwick, Rhode Island, Philadelphia, Pennsylvania, Williston, Vermont and Naples, Florida.