Without wishing the summer away, it does seem like it will only be a matter of time (a short matter) before you have some customers sending their kids off to college. For virtually all parents (and for the kids as well), this can be a very emotional time. Unfortunately, during this time, it is questionable whether the issue of insurance is given any thought. Since “stuff happens”, there is the possibility that the current coverage may not be sufficient with tremendous ramifications. What are some of those issues?
As most insurance professionals are aware, the HO policy provides typically 10% of coverage away from the main premises. Based on the coverage that the parents have, this may or may not be enough. By the time you factor in clothes, a stereo, a computer, etc., the values can be more than one would initially think. Will the 10% be enough?
Another significant issue deals with exactly where the child is living. If they are living in a dorm or some other type of college housing, coverage under the parent’s homeowners would typically apply. However if the child is living off campus in an apartment or in a fraternity or sorority house (this applies to approximately 20% of all college students), most insurance companies consider these arrangements as a permanent residence. This would then preclude coverage from applying under the homeowners policy. This means no property or liability protection. The child should then consider securing a renters policy to cover their possessions and their liability exposures.
Generally, the person who signs the lease is held liable if someone is injured on their leased premises. Do the parents know who is signing the lease?
When it comes to auto insurance, if the student is taking a car to college, the goal is to make sure that the car is properly insured. If the child is taking one of the family cars, be sure that they are listed as a driver on the policy. Another key issue is to make sure that the insurance carrier is notified of the “new” garaging location. While this may result in a higher premium, the insured can also feel confident that the car is properly covered.
Since at the end of the day, the student is ultimately responsible for the car and what happens with it, a good best practice is for parents to advise their kids not to let anyone else drive the car. If a major accident were to occur, the parents’ underlying limits may not be enough.
Obviously any discussions should be well documented in the agency system as well as with a memo back to the parents memorializing the conversation.
These are just some of the insurance issues that come into play when kids go off to college. Unfortunately, fires, car accidents, liability issues do arise from the students as they head off to college. How confident are you that most parents know these issues? Consider dedicating a newsletter / blog / social media message / e-mail blast, etc. to your customers to educate them and encourage them to contact the agency for further discussion. Ironically, you may just find yourselves selling some insurance.