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Insurance Considerations for College Students

Insurance Considerations for College Students

Does your college student need property or liability insurance? I’m asked this question by clients who have a son or daughter headed off to college each August, and it is that time again. The answer is it depends more on where they’ll live; whether it’s in a dorm room on campus or off campus in an apartment, condo, or home. Let’s review both scenarios. Dorm Room: If your son or daughter will live on-campus in a dormitory they don’t need renter’s insurance. Most home insurance policies provide coverage for personal property off premises, or items stored in a dorm room, storage unit, etc. The amount your home insurance policy covers depends on the carrier, but it’s usually 10% to 20% of your personal property or contents. For example, a home insured for $200,000 will have contents coverage ranging from 60% to 75% of the home’s value or $120,000 to $150,000. The amount of off-premises contents coverage will range from $12,000 to $30,000, which should be more than enough coverage for the typical dorm room. The only caveat is anything lost or stolen is subject to the home insurance policy deductible. Texas home insurance policies normally have a deductible ranging from $1,000 to 1% of the home’s dwelling value which means the home policy deductible will be $2,000 if there’s a 1% deductible for a home with an insured value of $200,000. Items such as smart phones, laptops, tablets, and musical instruments can be scheduled on most home policies. Scheduling an item on a home policy simply means listing that item or items for their stated value under the scheduled items portion of the policy. This is optional coverage on the home policy and will have a nominal cost to add it. It also usually means there’s either no or a small deductible such as $100. Apartments & Rent Homes: Many students move into an apartment or rent a home after the first or second year at school. I recommend a renter’s policy when that happens because the student usually has more personal property than their dorm room accommodates. You’ll need enough coverage to cover more electronics, decorative accessories, furniture and any appliances you own such as a washer and dryer. Renter’s insurance policy rates are determined by the amount of the contents coverage, what type of home the student is living in, where the home is located and protective devices such as fire and burglar alarms. The cost of a renter’s policy will range from $150 to $300 a year. Common deductibles are stated in dollar amounts such as $250, $500, and $1,000 depending on the carrier. If they have roommates living with them,...

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Converted School Buses and Car Insurance

Converted School Buses and Car Insurance

I received a call a couple of weeks ago from someone who’d been referred to me. The caller needed car insurance for a Blue Bird bus he and his wife were buying. Their plan is to convert it into an RV and live in it as they drive to different parts of the country where they’ll live and work for varying timeframes. The question is what kind of car insurance would they need and who’d write it? I initially thought this would be an easy policy to write, after all, I have several carriers who write RVs. None would. I then called the underwriters with the broker firms I work with thinking they could write a car insurance policy for it but they couldn’t either. I struck out with all my carriers but had several interesting discussions which helped me understand the difficulty in writing such a policy. Below are the three issues which resulted in the “no” answers I received. Commercial vs Personal: Blue Bird buses are recognized as commercial vehicles. Anyone who drives a school bus must carry a commercial driver’s license. A RV, on the other hand, is designed as a personal vehicle to be driven be anyone with a standard driver’s license. Converting a school bus to a traveling home means changing the vehicle classification from commercial to personal thereby requiring an initial commercial policy until it’s converted to a RV. Once the conversion is complete it needs a personal, or RV insurance policy. No carrier or broker was able or willing to write the vehicle one way and then shift it the other way when the project was completed. Intended Use: This line of reasoning from a couple of underwriters, is similar to whether this is a commercial or personal vehicle. It’s based on what the Blue Bird bus was originally intended to do, carry people. Converting from a commercial vehicle to a personal vehicle changes its original intended use and caused a couple of underwriters to say no. I run into this with a few underwriters when someone converts a commercial building, barn, etc., into a home. These companies won’t write a home which wasn’t originally built to be a home. DIY vs Skilled Work: The other problem resulting in underwriters declining to write a RV or car insurance policy is who is doing the conversion work. The couple buying the bus are intending to do most of the work themselves. They will have a skilled electrician and plumber assist them with wiring and adding the kitchen and bathroom, but intend to do the finish out themselves. DIY projects of this kind, as well as on kit cars,...

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