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The Rough Notes Company Inc.



June 24
10:13 2020

Mind the Gap

By Marc McNulty, CIC, CRM


Watch out for policy variations

As the world begins to return to a new normal following the initial spikes of the COVID-19 pandemic, many young adults will undertake a ritual that has been around for generations: leaving home to attend college. Insurance is most likely the last thing on their minds—if it’s even on their minds at all—but some of your clients who are parents might inquire about coverage. This may stem from off-campus housing requesting proof of insurance, or it may simply come about as a topic of conversation from your clients who understand the value of proper insurance protection.

[W]hat do you tell [your clients] when they call and ask “does my daughter have coverage for her contents while she’s at college” or “does my homeowners liability apply to my son when he goes off to school this fall”?

What do you tell them when they call and ask “does my daughter have coverage for her contents while she’s at college” or “does my homeowners liability apply to my son when he goes off to school this fall”?

The initial problem is that, while they may be similar, many policy forms differ slightly. This means a “one-size-fits-all” answer will not be sufficient.

Let’s take a look at the policy language from a few different coverage forms. For starters, the ISO HO 00 05 05 11 form extends Coverage C – Personal Property as follows:

2. Limit For Property At Other Locations

a. Other Residences

Our limit of liability for personal property usually located at an “insured’s” residence, other than the “residence premises”, is 10% of the limit of liability for Coverage C, or $1,000, whichever is greater.

We now know that there is indeed some coverage built into the form. However, let’s check the definition of “insured” first, as there is an age limitation within it:

5. “Insured” means:

b. A student enrolled in school full-time, as defined by the school, who was a resident of your household before moving out to attend school, provided the student is under the age of:

(1) 24 and your relative; or

(2) 21 and in your care or the care of a resident of your household who is your relative

Now that this is clarified, what about personal liability? Fortunately, there is nothing in the ISO policy form restricting coverage when a student is away at school. As long as he or she meets the definition of “insured,” personal liability coverage will apply (subject to the policy limitations and exclusions, of course).

A second form includes the previous Coverage C ISO language, but also includes the following language:

However, this limitation does not apply to personal property:

3) Owned by or used by a student, as provided in Paragraph c. of the definition of “resident relative”

In this case, the 10% or $1,000 limitation has been removed and the full Coverage C limit will apply as long as the student in question meets the following definition of “resident relative”:

c. A student enrolled in school full-time, as defined by the school, who met the definition of “resident relative” as provided in a. or b. above before moving out of “your” household to attend school, provided the student is under the age of twenty-four.

Notice that both of these forms require that the student be full-time. A third policy form, which has the same percentage and dollar limitation (and also requires that a person be under the age of 24 and in the care of a Named Insured), has no such stipulation:

Anyone described above who is a student temporarily residing away from your residence premises while attending school shall be considered a resident of your residence premises.

Finally, we have a fourth form that puts a different spin on things. In addition to Personal Property being referred to as “tangible personal property” in the form, the reference to a dollar amount is removed and the Coverage C percentage is lowered:

Our limit of liability for tangible personal property usually located at a covered person’s residence, other than the residence premises, is 5% of the Property Location Limit shown on the Coverage Summary.

It should be noted that there is no reference to a “covered person’s” (aka insured’s) age under this final form, as it refers to the term “family member,” which is defined as follows and, like the third form, doesn’t stipulate that the student be enrolled full-time in school:

5. Family Member means a person related to you by blood, marriage or adoption who is a resident of your household. This includes a ward or foster child.

For the purposes of this definition, to be considered a resident of your household when evaluating coverage for a loss, a person must have been actually residing in your household on the date the loss occurred.

However, your:

a. Son;

b. Daughter;

c. Ward; or

d. Foster child;

In the United States military or away at school will be considered a resident of your household unless he or she has demonstrated an intent to reside elsewhere permanently.

As you can see, the slightest change in policy language can make a large difference in how you answer your client. A 23-year-old who is enrolled part time while away at school could have no coverage at all under some of these policy forms, while that same individual could have 5%, 10%, or even 100% of the policy’s Coverage C limit if he or she is a full-time student.

Now you’ve seen what is built into various base homeowners forms. But what if you have a situation where the student’s age or classload falls outside of what is built into the policy? For example, your client may have a student who is older than 24 or is a part-time student. Their insurance carrier may offer the HO 05 27 endorsement (or an equivalent form) which is titled Additional Insured – Student Living Away From the Residence Premises. For an additional premium charge, the carrier will list the name and address of the student along with the school he or she is attending. This endorsement then amends the policy definition of “insured” to include the student listed in the schedule, so the Coverage C provisions will then apply to him or her and liability coverage will be extended accordingly.

What do you do if your client tells you that the Coverage C amount built into the policy is insufficient? Check with the carrier to see if they offer the HO 04 50 (or equivalent), which is titled Increased Amount of Insurance for Personal Property at Other Residences. This endorsement allows a specific location to be listed along with a specific limit for Coverage C at the location. Of course, an additional premium charge will be applicable.

Whew! Let’s say you’ve taken the client’s call, figured out what is included in the base form and also figured out if the HO 05 27 or HO 04 50 needs to be added. Then they hit you with this: “Oh, and by the way, the landlord is asking to be an additional insured. Can you go ahead and add that to my policy?”

The answer to this is … maybe. Some carriers are willing to do this while many aren’t too keen on the idea. You’ll most likely find that a separate renters policy will have to be issued in order to get the landlord and/or property manager listed as an additional insured on the insurance coverage. The advantage of going this route is that you can list the student as the Named Insured and can tailor each of the limits of insurance—property and liability—to the needs of the student.

Adding endorsements to an existing homeowners policy or issuing a separate renters policy for a student away at school might raise the blood pressure of some of your clients. However, keep in mind that, if the student isn’t taking a vehicle to school and the school is located 100 miles or more away from home, many insurance carriers will offer an “away at school” discount. That having been said, you might be able to offer your client some auto insurance savings to help offset any new additional premium they will incur on the homeowners side of things. That should help to lower their blood pressure, which will in turn help to keep them around as your client for a little while longer!

The author

Marc McNulty, CIC, CRM, is a principal at The Uhl Agency in Dayton, Ohio, and has been with the agency since 2001. He divides his time among sales, marketing, technology and operational duties. You can reach Marc at

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