Fall 2023 Insurance: Back to School, Homeowners and more
By Michael Giusti
Fall is a season of highs and lows; there’s the excitement around back-to-school season but fall also brings hurricane season and the continuation of wildfire season. All these seasonal occurrences present unique insurance issues for consumers to navigate.
As the brutal heat of summer begins to break, there is a vast array of things to consider with regards to insurance, from shopping for new coverage, to renewing existing coverage, to simply evaluating if an existing policy is providing all that you’re looking for.
This fall insurance guide will provide a rundown of many of the issues facing consumers now that summer is winding down.
Back to School & Health Insurance
As families get ready to send their youngsters back to school, health insurance becomes one of the biggest issues that needs to be addressed.
In nearly every school district, children need to prove they are current with their vaccinations. And many activities, such as sports, require doctors sign off through a physical.
Affordable Care Act-compliant health insurance policies should have parents covered in both those areas.
The cost of vaccines is always covered at no cost to the patient.
However, because many students were not attending school in person during pandemic lockdowns, and in many cases were avoiding going to public places, such as the doctor, students suffered a dip in routine immunizations. But schools are now cracking down and insisting that those vaccinations are brought up to date, especially when it comes to meningitis and whooping cough.
Two other important vaccines that are not always required are the HPV and COVID-19 vaccinations. While they aren’t required, most health care professionals insist that they are crucial for young patients.
Affordable Care Act-compliant plans also cover one routine well child checkup each year. For that school physical to be covered at no cost, parents typically need to make sure to have that paperwork ready during that annual visit. An additional visit for a physical is going to come with a co-pay, so wrapping it into the annual checkup is one way to save.
If parents don’t have insurance, fall is a good time to think about it. Open enrollment in most (though not all) employer-sponsored health plans follows the calendar year. As Halloween decorations come out, open enrollment packets also tend to start hitting mailboxes.
For parents who aren’t eligible for an employer-sponsored plan, an Affordable Care Act Marketplace plan would be the next best option. Unfortunately, open enrollment for those is going to have to wait until around Christmas.
For lower-income families, the children might be eligible for their state-run Children’s Health Insurance Program, or CHIP. There is no specific open enrollment window for CHIP. Anyone who is eligible can enroll at any point. Applying through a state Health Insurance Marketplace, such as healthcare.gov, will tell parents if their child is eligible for CHIP any time of the year.
For students heading off to college, health insurance is once again something they need to consider. Most universities require students have a valid health insurance plan as a requirement for attending school.
If the student’s parents already have a policy, that is often sufficient.
But there can be some catches, especially if the student is moving far away or out of state for school. While the parents’ policy would still cover them while they are away in cases of accidents or emergencies, that doesn’t mean that the policy’s provider network will be adequate for more routine care. And some Marketplace plans have extremely limited options once the student leaves the state.
Students have several options to get a supplemental plan — or a primary plan if they aren’t covered by their parents’ policy to begin with.
Many schools offer a health insurance plan for their students that can be rolled into the tuition bill. This has the benefit of both covering them, but it also can often be paid through financial aid.
Marketplace plans can also be an option.
Moving to a new ZIP code is a qualifying event allowing students to enroll in a plan, even outside the open enrollment window.
If the student is applying for a separate Marketplace plan, the student is still included in the parents’ tax household, which means everyone’s income will be calculated for purposes of a premium subsidy. The only exception would be if the student has been legally deemed independent – which is rare.
If a student does come to campus with a health plan, they should keep an eye out for the process to get the university’s automatic coverage removed from their bill. Paying for two policies is usually just wasteful, especially if their original policy offers adequate coverage and a sufficient provider network.
If the parents’ plan does work while the student is away at school, the Affordable Care Act dictates that young people are eligible to stay on their parents’ plans until they are 26.
Other Back to School Insurance Policies
It is always a good idea for families to tell their insurance agent that junior is heading off to college.
On the bright side, many auto insurers offer good student discounts, which can knock off hundreds of dollars from the premium.
Also, depending on the ZIP code the student is moving to, some insurers will offer a different rate based on the student’s new home than they did for the parents — potentially for the better or worse.
If the student leaves the car at home, some insurers will offer discounts because it isn’t being driven on a daily basis.
In addition to auto insurance, life insurance is increasingly becoming a policy students should be thinking about as they start their young adult life.
While life insurance is traditionally considered a way to replace someone’s income for their dependents if the worst happened, some students are considering life insurance policies if their parents are helping out financially and that help comes with the expectation of repayment.
When it comes to federal student loans, debt is automatically eliminated in the unfortunate and untimely case of a student’s passing, so parents wouldn’t be faced with that additional burden. But that’s not the case with private student loans. If the parents were to co-sign on a private loan and the child passes away, the parent would still be required to pay it back.
Parents are also increasingly loaning their children cash to start their lives. They are also acting as co-signers on car loans and in some cases, mortgages.
If a student wants to help protect their parents until that cash is paid back, term life insurance policies are typically very affordable for young healthy students.
Tuition insurance is another option that some families should be considering. Tuition insurance pays families back if their student can’t finish the semester due to an accident, illness, or some other condition out of their control – including diagnosed mental health conditions.
To decide if tuition insurance makes sense, families should first look at the school’s refund policy. Most universities won’t offer full refunds after the first week or so, and by midterm, the amount a family would get back is a fraction of what they paid.
Tuition insurance covers the cost of tuition, room and board, other fees. Some policies also come with services to help in case of a crisis, such as help contacting families, or helping arrange a return home in an emergency.
When it comes to the students’ belongings, families often fall into the trap of underestimating the value of all the things packed into a dorm room or apartment. Even just a wardrobe of clothes and basic furniture could run into the thousands of dollars if they had to be replaced. Renters insurance is an inexpensive option for protecting all those items.
The parents’ homeowner’s insurance sometimes covers the contents of the student’s dorms, but it never extends into their apartments if they are living off campus.
Renter’s insurance covers loss or damage to the student’s property in their rented space. But much like homeowner’s insurance, floods aren’t covered and require a separate policy.
In most cases, renter’s policies also cover loss of use, which is handy if they live in an area where they have to evacuate, or if their apartment is damaged and they can’t live there temporarily.
Renter’s policies also provide some liability coverage. College students may feel invincible, but they also can be famously reckless, and they can still get sued. A renter’s policy would help protect them if that were to happen.
Renter’s polices also kick in if a visitor is injured at the student’s apartment. They provide liability coverage if the injury were the student’s fault, and they often offer some medical coverage even if it wasn’t their fault.
Electric Scooter & E-Bike Insurance
One of the bigger trends hitting the street right now are electrified mobility devices, commonly known as electric scooters and electric bikes.
Insurance for e-bikes is important, not just because they are expensive and would be costly to replace in case of an accident, but also because in many cases, e-bikes and electric scooters aren’t covered by normal insurance policies.
When it comes to insurance, electric scooters and e-bikes fit in a gray area. Most auto insurance policies won’t cover them because non-motorcycle policies exclude two-wheeled vehicles. Plus, in most cases they aren’t registered as motor vehicles.
Additionally, in most states, homeowner’s policies would exclude them as well because they have policy limitations excluding motorized vehicles.
To fill that gap, some insurers are now offering specialized e-bike policies. Coverages vary by provider. Some just provide liability insurance in cases where you collide with another vehicle, a pedestrian, or a stationary object.
Still others offer a full suite of options you might find in an auto policy, including comprehensive and collision coverage that would pay to repair or replace the bike after an accident, or if it was stolen or vandalized. Some policies even have a medical component and can pay medical bills (up to the policy limit) in the event of an accident.
In addition to their status in the insurance gray area, e-bikes have also been getting headlines for a less-favorable reason — some of their batteries have been catching fire with disastrous consequences.
Most advocates point to the fact that the fires tend to be with discount and off-brand batteries. But the fact of the matter is that their lithium-ion batteries are extremely energy dense, and if they fail, it can end in a blaze.
When it comes to picking a device, advocates say the best thing to do is to ensure the mobility device and its battery both comply with the voluntary Underwriters Laboratories safety standards.
No federal regulation requires e-bikes to comply with UL standards, and only a handful of states and communities have started mandating UL oversight. But when it comes to safety, having that extra layer of assurance may be worth the added cost.
AI and Insurance Trends
Another trend sweeping the nation and the world this fall is the widespread adoption of artificial intelligence.
AI is interesting from an insurance perspective, both because of the question of who is liable if they do something dangerous, damaging, or illegal, but also because of the implications they hold in potentially transforming the insurance industry itself.
One area AI could cause trouble would be if it were to give instructions to do something dangerous. A recent report about a grocery store’s AI recipe builder told about how the AI gave instructions for a drink that would actually result in deadly chlorine gas.
In another case, an AI chat bot ended up hallucinating the facts of a case and ended up confusing the details. While that might not always be dangerous, in this case the AI accused a whistleblower of being the person who actually committed the crime, leading to a defamation lawsuit.
In these cases, the question arises as to who holds the liability and who is ultimately at fault for the AI’s response.
In the case of the chlorine gas, it could be argued that the person using the AI was at fault for suggesting ingredients that would end up being deadly. But on the other hand, it could be argued that the company that programmed the AI should be accountable for what it says.
For the time being, the laws and court cases just don’t exist to determine who is going to be held at fault, and ultimately whose insurance will end up paying for any judgements that might come from these cases.
From an industry perspective, AI is also disrupting several areas.
Already, AI is being used to beef up chat bots on insurance company websites. And as the technology evolves, it is going to inevitably move into other customer service roles, such as call center work that is currently being outsourced.
Some companies are also experimenting with AI to help build underwriting models and to process claims. AI could also be used to help with routine tasks, such as policy reviews and even help writing coverage opinions.
As AI continues to move into different and new areas, advocates are stressing the importance of actively guarding against any unintended bias or discrimination that the AI models might introduce. Discrimination in insurance is illegal, but because it is impossible to see the factors that go into AI decisions, many people worry that AI could easily double down on existing biases and inequalities and unfairly discriminate without the transparency required to prevent it.
Homeowner’s Insurance in the Fall
In many communities, the homeowner’s insurance markets are teetering and on the verge of collapse. Places like Florida, California, and Louisiana have been plagued by large players pulling out of their market, and the rest of the companies struggling with keeping up with the demand for policies.
The big-player pullback has been driven in large part by climate-related disasters – namely wildfires in the West and hurricanes on the East Coast and Gulf Coast.
In addition to a lack of available homeowner’s policies, flood insurance is also getting more expensive for many communities. The federal program has changed the way it prices policies and has adopted an underwriting model called Risk Rating 2.0.
The idea of Risk Rating 2.0 surrounds more accurately shifting the cost of insuring at-risk communities to the places more likely to file claims. But the result has been out-of-reach policy prices for many working-class communities. Many people are dropping their coverage rather than paying the new, higher rates.
As wildfire season continues and hurricane season switches into high gear, homeowners need to ensure their coverages are in place early. That is because new flood policies come with a weeks-long waiting period before coverage kicks in. And homeowner’s insurers often won’t bind new policies once a named storm is in the Atlantic basin.
That means that if someone is waiting until they see a storm coming before they look for insurance, it is already too late.
Another thing homeowners need to watch for is that in some cases, windstorm damage is being specifically excluded from some policies. In those cases, to be covered, homeowners need to purchase a separate windstorm policy in the same way flood insurance is a separate policy.
Homeowners also need to pay attention to their policy to see if there is a separate windstorm deductible. While a typical homeowner’s policy might have a $1,000 deductible, if there is a windstorm deductible provision, that deductible could jump up to become a percentage of the home’s value. So, for a $300,000 home, if the windstorm deductible was 3%, that $1,000 deductible jumps up to $9,000 if the damage is caused by a named storm.
And it is always important to reiterate that floods are never covered by homeowner’s policies. Even if the water is blown into the house by wind, if the water is touching the ground, it isn’t covered by a homeowner’s policy.
Homeowners should also pay attention to their policy’s loss of use coverage. This provision can pay for the cost of a mandatory evacuation ordered by the government. It can also help cover the temporary cost of living somewhere if the home gets damaged to the point that it needs to be repaired before the family can move back in.
And if those repairs are happening, it is also important to pay attention to the “accumulated depreciation” section on the insurance claim.
Even if a policy will pay for replacement costs, meaning they will pay for what it costs to actually repair the damage, in many cases the insurer will hold back a portion of the claim as accumulated depreciation.
When the homeowner makes the repair, they need to file proof of that repair with the insurer, which will then pay the remaining amount. Most policyholders don’t know to make that second claim, and they leave thousands of dollars on the table by not following up with proof that the repairs were made.
While a break from the summer heat is going to be universally appreciated, fall brings with it a multitude of insurance considerations.
From back to school to health care and life insurance, and even disastrous weather, ensuring the proper insurance policies are in place can help everyone relax a little more and truly appreciate the cooler weather.
Michael Giusti, MBA, is senior writer and analyst for InsuranceQuotes.com