If you have a child getting ready to graduate high school and head to college, has the following thought ever crossed your mind? “When my child moves out of my household, what does that mean for my insurance? As “trusted advisors” we often get asked the following:
My son/daughter is away at college and does not drive my car. Why do I need to keep him/her listed as a driver? The answer is simple; you as a parent are still legally responsible for your children while they are in college up to age 25. When they come home they have access to your cars and most likely will drive them.
What happens when they take one of my vehicles to college? Even more scary, they can let someone else drive your car, and who knows where it will be parked.
Do I need extra liability coverage? This is your decision, but since we can’t be with our children and we all know how peer pressure can be, I can’t imagine not purchasing an umbrella policy. My daughter decided she wanted a dog at school, so even though we were not in favor, she purchased one with her birthday money. The dog turned out to be more aggressive than we would have liked, and, had he bitten someone, we would have been responsible and very possibly could have been sued. An umbrella policy will give you that added “Piece of Mind” coverage in the event of a serious accident or liability claim. This policy can be purchased as low as $175.00 annually. The extra coverage will respond after your limits under your underlying home and auto limits have been exhausted.
Do they have coverage for their personal property? Under most homeowners policies they have 10% of your personal property coverage that will respond from your homeowners policy. This can vary from state to state.
Should I write a separate policy for their personal property? Some parents will decide to limit their policy from responding by taking out a separate renters policy in the child’s name. When my daughter went to college I took out a small renters policy so she could start establishing herself. The premium was just a little over $100. a year and if she had a claim it could be filed under her policy instead of mine. Well guess what? I did get a call, and during a party, her laptop suddenly went missing. We did add an additional endorsement to give her agreed value for her laptop so we were able to file the claim for reimbursement minus the deductible. By doing this I did not have a claim against my personal homeowners policy.
What happens when our college kids have roommates? Each roommate is responsible for their own personal belongings.
Bottom line: As parents, is there ever a moment when we ever really feel like we are not responsible? Until next time!
By Robin Price
