Seems like yesterday when my son, Chase, was swinging on jungle gyms. It is hard to imagine that this day is finally here when he is off to college. With all the little odds and ends to take care of, I wondered whether all his electronic gadgets are covered under my homeowner’s policy. After doing some reading, I am calling my agent and reading my policy when I get home from Philadelphia.
As usual, I like to check the FC&S Bulletins for some general information with these practical questions. While I have suggested that all policyholder attorneys and public adjusters subscribe to this publication, insurance agents and brokers can get some great ideas as well because the coverage topics are very “main street” rather than some of the exotic situations my clients bring to our firm.
A quick search of the FC&S database had the following topic:
Student Away at College—Homeowners Coverage for Personal Property?
See how easy research can be when you invest in specific products that reflect your interests? I get paid nothing from the National Underwriter to promote this product. The bottom line is that if you are in the business of property insurance in any capacity, this product is a must read.
Here is the question and answer:
Several of our clients have sons and daughters attending college away from home. In some cases, they attend college locally, but choose to live at the dorm. We thought they had full coverage for their property under their parents’ homeowners policies so long as they maintained their primary residence with their parents.
Now we have been advised that there are several restrictions, one of which is that, if the students are over 21, there is no coverage at all. Could you provide some insight?
Answer
The ISO homeowners forms include limitations for personal property away from the residence premises. First, for personal property “usually located” at an insured’s residence other than the “residence premises,” there is the limitation of 10 percent of the coverage C amount, or $1,000, whichever is greater.
For many students, the school year’s length means that their property is “usually located” at another residence. Although the dorm or apartment is not their permanent residence, it is, nonetheless, a “residence.” Webster’s Collegiate Dictionary offers this definition of “residence”: “…the act or fact of living or regularly staying at or in some place for the discharge of a duty or the enjoyment of a benefit.” Therefore, the student’s property is covered, but the coverage C limitation applies.
There is another limitation of coverage under the peril of “theft.” The policy states that this peril does not include loss caused by theft unless the student who is an “insured” has been at the “residence away from home” at any time during the 45 days immediately before the loss. So, for example, if the student came home for the summer and left personal property in his dorm room, there could be a potential gap in coverage, unless he returned to the dorm room at some time within the 45 days preceding a theft loss.
The only requirement the policy makes regarding age of an insured is that, to be considered an “insured,” the person must be a relative residing in the named insured’s household, or any other person under the age of 21 in the care of a resident relative or the named insured.
The only problem is that many of the policies sold are not ISO form policies. A number of articles I found on this topic strongly suggested that parents with children away at college call their agents. Indeed, the National Association of Insurance Commissioners repeated this advice:
Check to see if your homeowners policy includes identity theft insurance, and ask your insurance agent if this extends to your student living away from the your primary residence. If not, you might be able to purchase a stand-alone policy from another insurer, bank or credit card company. If your student is renting an apartment, ask if their renter’s insurance covers identity theft, or if it could be added to the policy.
I also ran across a related matter involving theft of personal property away from the residence premises. Many people do not realize that most homeowner policies cover personal property anywhere in the world with few imitations. One of the possible limitations came up in another FC&S discussion with the question asked being:
I have an insured with a standard homeowners policy. He has a fishing boat insured on the policy. One day he took the boat to a fish farm (a limited liability company in which he has an interest). While there, some personal property—fishing rods, tackle boxes and the like—was stolen. When I turned the claim in, the adjuster said that the named peril of “theft” for personal property did not apply, since it was stolen from a secondary residence that should have been scheduled on the homeowners policy.
We argued that it was a farm, but the adjuster was adamant in that it should have been scheduled. May we have your thoughts?
The answer by the editors was excellent and on point as usual:
The policy is quite clear in that the theft peril does not apply to personal property stolen at any other residence owned by, occupied by, or rented to an insured. A residence, according to Webster’s Collegiate Dictionary, is “the place where one actually lives as distinguished from one’s domicile or a place of temporary sojourn,” and “the act or fact of dwelling in a place for some time.” So, if the insured does not actually reside at any time at the farm it is not a residence, and therefore the loss is covered. The adjuster may be thinking that, if there is a dwelling on the property that makes it a residence, but that is not the case. It must be the insured’s residence—that is, where he lives—for the exclusion to apply.
As for scheduling the farm on the homeowners policy, that is an underwriting decision.
College is a unique experience. I am certain that I will not be thinking of the subtle aspects of property insurance coverage when saying my good-bye to Chase. But if some bizarre manner of destruction that frequents the lives of humans under the age of twenty-one mysteriously occurs, I will at least know the property is covered. Whether the all-risk exclusionary scriveners crafted a clause to exclude such an extraordinary event is another story.
