Personal Automobile Policy and College Students
As your children go off to college, you may want to take some time to review and discuss the different nuisances of your personal automobile coverage with your insurance agent. Coverage often depends on the details of your situation and the interpretation of it.
For example: If my child drives a roommates' car and is involved in an accident will he/she be covered under my policy?
Under the Personal Auto Policy (PAP), courts have generally held that students away at school are still considered to be "family members" and therefore covered while operating automobiles at school. However there is an important exclusion in this policy, if the vehicle is furnished and/or available for the regular use by a family member, there is not any coverage under your, the parent's, policy.
In looking at this policy further and without debating the issues of furnished and/or available or regular use, let's assume the student does have regular, unrestricted access to a roommate's car. In that case, she is at the mercy of the insurance on the vehicle. There is an endorsement commonly referred to as the extended non-owned coverage for named individuals that may provide coverage and is routinely used for this type of exposure.
This endorsement does not afford coverage under Part A or Part B of the policy for any accident involving: a vehicle owned by the individual named in the schedule or in the declarations by a member of the same household or any accident involving temporary substitute vehicle for such owned vehicle.
So even though this endorsement provides coverage to family members for vehicles furnished by or available for their regular use, it doesn't provide coverage if the vehicle is owned by a member of the same household. On occasion, claims involving a college student's roommate's car were denied under this endorsement.
According to the insurer, the roommate was a member of the same household. The key to determining coverage lies within the definition of "household." According to Webster, a household is a family living together — those who dwell under the same roof and compose a family. Generally, the term as used in the automobile policies is synonymous with home and family.
The Black's Law discussion of family indicates that it is comprised of blood relatives or a close-knit social unit with a high degree of permanency, living under the control of one head of the household.
What if it is not her roommate but her best friend across the hall that makes the auto regularly available, does that make a difference? Clearly in this case, the coverage applies since they aren't roommates…or does the entire dormitory constitute a household?
There are not any easy, clear-cut answers. So the best thing to do is to discuss the situation with your insurance agent in advance. As you can see, insurance coverage can be subject to interpretation and difficult to understand.
Please Note: This article reference the "ISO standard" personal auto policy and their extended non-owned coverage for named individual endorsement. Be aware that YOUR insurance company's auto policy may differ from this industry standard form. So be sure to check with your agent to see if the issues discussed apply to your situation.
