Students who leave home for school represent a big opportunity for brokers to provide value-added advice on a variety of insurance coverage changes, but the key is for brokers is to get in front of the students before they make that rite of passage into adulthood.
“It is something the broker should be aware of that’s changing in that family situation,” Janine White, vice president at Kanetix Ltd. “They need to proactively understand that that student is moving away, because the parents – and especially not the students — are not going to reach out proactively to [inform the broker].”
If the broker can anticipate the move to school, he or she will be able to advise the student and the family about a whole host of insurance services that may come under the broker’s portfolio. A student move away from home can affect property insurance (e.g. the student will need tenant insurance), auto insurance, health coverage, and even things like travel insurance to cover student vacations.
How is the broker supposed to know when the student plans a move?
“If the student is on the parent’s auto policy, you already have awareness that that person exists in the household,” White says. “You will know, as a broker, that in a two-car, two-parent, two-child family, for example, the parents have typically added the child on as an occasional driver to that auto policy.
“So, at any point in time, the broker should know that there’s a good chance that student is going away to school, and that’s the time for proactive outreach to say, ‘Hey, is this student situation changing?’”
The process of finding potential students could be automated through the broker management system.
“The very first step from a broker’s perspective is to be able to easily access the information proactively about their policyholders,” White says. “It starts with the systems and the data. As soon as you have the ability to get the data out of your systems, that’s when the proactive reach-out [to students and their families] can occur.”
What value-added advice can a broker provide in advance of a student leaving from home?
On the property side, a broker can advise a client to think about a tenant package not just in terms of insuring contents, but also in terms of liability coverage. As we all know, stuff happens to students, and tenant packages typically offer $1-million in liability coverage, although, depending on the situation, brokers may advise clients to purchase a $2-million liability cover, given higher costs around litigation.
A student move could have a huge impact on car insurance. If the child takes the car to university, the student will shift from an occasional driver status on the car to a primary status. “So, the policy doesn’t fit any more,” said White. “It isn’t rated properly, so you could look at some potential denial of coverage if that policy doesn’t change.”
Conversely, if the student does not take the car, the broker can advise on a discount available to the parents. “That student changes from an occasional driver to ‘Student away,’ which means they don’t have as much access to the car,” White notes. Parents are therefore potentially eligible for a discount based on the change of status.
Brokers may also be able to advise on a way to avoid getting double-charged for health insurance. “The school will typically charge for private health insurance for the student through student fees, so why wouldn’t you look at getting that money back, and not paying for it, if you already have coverage under your family [policy]?” White says. “There’s a potential savings there.”
Brokers can even advise of travel insurance if the student plans vacation getaways during the school breaks.