College Student Coverage on Parental Policies
I was under the impression that regardless the
type of college the student is attending they would still have some coverage
from a parent's policy. To determine if they were still considered a resident,
one question we asked is "do the parents still claim them as an exemption
on their taxes?" Not the same as extending the Health insurance to age of
26 but if they take them as a deduction on federal taxes, they would still be
considered covered unless they specifically "excluded" them as
drivers. This is also why the carriers give an away at school discount and good
Tax status of the student is irrelevant; it's residency that matters. The PAP and the HO both extend protection to a family member or resident relative (depending on the form). The requirement is that the person be a family member related to the named insured by blood, marriage or adoption (including ward and foster child) who is a resident of the named insured's household. Residency means that is where they live and where the post office and state think they live (in general terms). It doesn't matter if you take them off on your taxes as a dependent or not.
The consensus of case law I've seen is that kids at college are usually still household residents of their parents. The points your raise are good ones and support that interpretation. But be sure the carrier's claims department is on board.
First, being considered a dependent on their parent's tax returns has no bearing on insurance coverage. There is no requirement that if the IRS gives the parents a credit on their tax return that our contracts must consider related dependents, students or otherwise, residences of the household. Our policies require that they are residents and whether they are depends on what the HO policy says and the actual circumstances of residency.
Starting in 2000, ISO added a paragraph regarding students living away from home at school. There are several coverage triggers that apply before coverage applies while the student is away from home attending school. This change in the "insured" definition has limited coverage for students if they are were not a member of the household before moving out to attend school, also during any semester they are not in school full-time as defined by the school they are not considered an insured and finally once they reach the age of 24 they are no longer considered an insured.. ISO also introduced an AI endorsement that can be used to fill some of the gaps in coverage due to this change I would check any HO policy to determine if it is a 2000, 2001 or 2011 edition date.
In addition, regardless of the change in the insured definition there is also the specific circumstance of the living arrangements of the student. If they live away from home and, for example, do not return during breaks or holidays, or open bank accounts where they are attending school, or rent apartments for periods of time beyond the school term, or register cars and get driver's licenses in the state they are attending school, etc. raises questions regarding their actually residency and would effect coverage based on these issues.
Being a tax dependent is a strong indication that a college student is still a resident of their parent's household. But, there are a lot of other factors courts will look at including how much financial support is provided, what the student's permanent address is, whether they're still unmarried.
Water Damage to Pull-Behind Trailer
Insured recently reported water damage to his 2015 pull-behind camper. While driving the camper to a campground they noticed a lot of water coming out of the camper. When they arrived at the campground they discovered that wind driven rain had somehow gotten inside the camper. The insurance company declined coverage saying their inspection revealed the damage was the result of several leaks happening over an extended period of time and they advised the intrusion of water appeared to be due to a manufacturer defect in not caulking or weatherproofing several areas of the camper which allowed the water to penetrate and cause further damage. Is this a logical declination of coverage under these circumstances?
There's no basis for the denial in the ISO policy language and this claim should be covered. Water damage is clearly a covered cause of loss under Other Than Collision. I did not see any exclusion for loss caused by inherent defect. Even the mechanical breakdown exclusion, if applicable, would not apply as it does not exclude any resulting loss. Even if the defect that caused the loss isn't covered as it wasn't "loss," the resulting water damage is covered. Insurers have been reluctant to pay these type of claims and many have adopted specific policy language to remove the coverage, but if the insurer hasn't, they owe for the loss and risk bad faith if they deny coverage without any basis in the contract for the denial.
What specific policy language was cited in the written declination? Just saying the manufacturer is at fault has nothing to do with whether or not the insurance contract responds and is likely not in compliance with the state's unfair claim settlement practices law if that's the case. This is an Other-Than-Collision claim so the carrier needs to cite an exclusion.
Training Agency Staff Binding Authority
What is the best process to train the Agency staff on binding authority with each appointed carrier? Should every Agent have a copy of the agency agreement or is there a better method?