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 The
Companion Advisor: Insurance
Student's Property
By James E. Bonnay, C.I.P., C.C.I.B.
October 2002
A Companion Advisor Article
The summer is almost over and
many homeowner's will have sons or daughters leaving home to attend a
University or College in some distant city. Parent's should be aware that
certain insurance related matters are applicable to these students.
The first concern is with regard to the personal property
that the student will take with them to University. Most Homeowner's policies
will cover the property of students providing the student is "temporarily
living away from home for the purpose of attending a school, college or
university". The key words are "temporarily away". If the
student intends to return home at breaks or at the end of the semester,
the wording will apply. However, if the student remains in the location
of the university after the semester or year has been completed, he/she
would no longer be deemed "temporarily away from home". The
Homeowner's may not apply and the student would have to arrange separate
coverage.
Although the Homeowner's may supply coverage for the
student, the policy should be reviewed with regard to limits. Some insurers
may apply a limit of 5% of the Personal Property limit of the Homeowner's.
Others may apply a dollar limit as low as $2,500! If a Homeowner's policy
or perhaps a Condo or Tenant's policy has a low limit on contents, the
student limit may be inadequate, to say nothing as to the adequacy of
a stated limit. Many students may take a laptop computer with them which
in itself may exceed the applicable student limit.
With regard to the laptop, does the personal property
coverage have an electrical disturbance exclusion? This is extremely important
to losses to computer equipment. Now, if the limit is inadequate to include
a laptop consider a separate Personal Computer policy, and it the policy
covers electrical disturbances? ( It puzzles me as to why a policy designed
for computers would contain such an exclusion, but believe me- they do!!)
Also, does the Personal Computer policy covers at the location of the
student? If the student is outside the country, the Personal Computer
policy may be limited to Canada and the U.S.A. The policy will apply to
the student property on a world-wide basis.
The liability section of a Homeowners policy extends
to cover students who are dependent on the Named Insured or spouse and
again the student is temporarily residing away from the principal residence.
If the student is attending a University in the U.S.A.
and particularly in the southern states such as Texas, Arizona, New Mexico,
Parents may supply the student with an automobile licensed and insured
in Ontario. Many of these students may venture to beaches in the northern
part of Mexico such as Puerto Penasco which is like the student Daytona
Beach of Florida. You should be aware that the auto policy will not apply
in Mexico and that Accident Benefits of the student vehicle or any vehicle
that he/she may be deemed a dependent will also exclude these benefits
for loss in Mexico. Furthermore, a vehicle driven in Mexico without valid
Mexican Insurance can land you in jail! In Mexico, you are guilty until
proven innocent - and that may take quite a while.
It is also a good idea to remember, OHIP will only cover
up to $400.00 (Canadian) per day for hospital expense. This will be highly
inadequate in many parts of the U.S.A. Most Universities offer Excess
Student Medical coverage to bridge this gap and include other medical
related benefits as well. Also if the student will be away from Ontario
for more than 212 days OHIP will cease to cover. This can be extended
for students but you must make application to OHIP and receive an extension
permission. It may be a good idea to review any group medical plan to
see how it may apply to students in this situation.
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James E.
Bonnay, is an insurance consultant, writing for the Independent Insurance
Brokers of Hamilton,Ont
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