My mother in law has offered child care in her Mesquite home for 2 decades. It’s been a labor of love for her. She loves kids. It’s also been a source of income for her. Many of the kids she’s watched have grown up and are now parents themselves. The number of high school and college graduations she’s been invited to is astounding. The long term reward has not been the income, although that’s been helpful. Her reward is watching the children grow up and knowing she’s played a part in them becoming adults.
When I launched Wise Insurance Group, she asked me to take a look at their home insurance to see if I could save them any money. Everything was straight forward until we began to talk about her child care operation.
In home child care raises red flags for insurance underwriters. What they see is RISK in all capital letters. Risk is a four letter word to most underwriters. In order to write a home policy for a person with an in home child care, there are several hurdles that have to be addressed including:
- How many children do you care for [excluding your own children]?
- Are you registered with the State?
- What safety and health procedures do you have and follow?
All three of these hurdles are important in having a Texas home policy implemented properly.
Number of children: Not all home policies will support in home child care. Most Texas policies will have a maximum number of children they’ll write. Any more than that and they won’t cover the home or child care.
- Many will cover up to two additional children than the owner’s own kiddos.
- A few will cover up to three additional children.
- Fewer still will cover four or more children.
State registration: Insurance companies prefer the in home child care is registered or licensed with the State agency that oversees and inspects child care operations. Registration or licensure demonstrates a couple of key things to underwriters:
- The child care will be inspected on a regular basis.
- It has to maintain compliance to the State regulations to maintain their license.
- That compliance means it adheres to various rules such as adult to child ratios, safety, nutrition, and more.
This level of interaction with the State provides a second set of eyes for the underwriter and reduces the level of risk in writing the coverage.
Safety and health: This section is actually a subset of being registered with the State. My mother in law actually has a procedures manual she uses in the administration of her in home child care. In addition, she meets or exceeds the State’s regulations in key areas such as:
- There is a fire extinguisher within the home mounted in a central part of the dwelling.
- The fire extinguisher is checked on a regular basis.
- Menus meet or exceed the nutritional guidelines of the State for the meals she serves.
- There’s a first aid kit that’s maintained to State levels.
- She attends ongoing education for child care providers.
All of these things help make it easier for an underwriter to say yes, provided the number of children is in line with what the company will write. Keep in mind:
- The more children watched, the smaller the number of companies available to write a home policy.
- If you haven’t pointed out that you run an in home child care, you place yourself in a position to have a claim denied that’s associated with the child care operation.
- Carry higher limits of liability and consider carrying a commercial policy. This adds to the operational expense but may help protect you financially in the event of a claim.
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