In New York and other states your nanny or au pair's status may depend on the number of hours worked
You're so thrilled that you just landed the world's best nanny to watch your kids this year. She's fantastic and reliable and will make your life so much easier, especially if you're trying to juggle a career and homelife.
But before you totally close the book on your back to school to-do list, make sure your insurance policies cover anyone you hire. A quick call to your agent will help make sure you have your bases covered, says Don Blizzard, a producer with P&I Insurance in Springfield, Penn.
How Could a Nanny Possibly Impact My Insurance Coverage?
Hiring household help (called domestic workers) can change some of your policy details especially if the person you hire is considered an employee by your state. State laws are generally very exact when it comes to what constitutes employee status, but each state is different. You can easily check your state's guidelines with a quick call to the state's labor department.
“In New York state, coverage for domestic help is determined by the number of hours worked,” says Kathleen Weinheimer, CPCU, AAI, senior vice president of industry relations at the Independent Insurance Agents and Brokers of New York.
Why does it really matter how many hours your employee works? Lots of insurance policies have different coverage for anyone who is technically considered an employee. For instance, your personal auto policy might cover your nanny if she drives the kids occasionally, but if her work hours actually make her an employee in the eyes of your state, your policy might exclude bodily injury for her (because workers' compensation should cover employees).
What Might Change in My Policy?
Typically your homeowners insurance covers guests and the occasional babysitter. But if you're looking to hire someone to be at your house on a regular basis or even live with you, letting your insurance company know about this new person's role is smart.
Typically, a larger umbrella policy (check to see if it needs to specify household employees) will cover you if anything ever happened, but, as Blizzard says, you have to make sure your underlying coverage is high enough for you to qualify for an umbrella policy.
What If My Nanny Drives My Kids?
Some families have a dedicated car for the nanny or sitter to shuttle kids to the beach, drum lessons, and friends' houses. Others prefer she just use her own car.
Whichever method works for your family, make sure your auto insurance matches this new scenario, says Blizzard. A quick call to your insurance agent is in order if your nanny starts driving your kids around. If she is going to regularly drive them, you'll want to find out if that's covered under your policy.
But you're not off the hook if she is going to use her car exclusively either. You'll need to make sure her policy is in good standing. You don't want to find out too late that she has too little insurance or, worse yet, none. If her insurance is too basic for your preferences, you can ask her to increase her coverage and offer to pay the difference. She also needs to check that she doesn't need to change her policy from personal to business as some companies might request that.
What Happens If She Gets Injured?
What if your nanny twists her ankle while watching the kids at the pool or taking them to soccer? You could be responsible for her medical expenses and possibly even lost wages unless you have specific insurance for that.
“The very best solution is to provide a workers' comp policy,” says Weinheimer. That's a separate type of insurance that covers your employee for potential injury (something often excluded from a typical homeowners policy).
States have widely varying requirements for coverage, and some states don't require it at all. Required or not, it's an important layer of protection for your family.
In New York, for example, an employee who works 40 or more total hours each week for you is required to have workers' compensation coverage provided by the employer. So if your nanny is full time, even if it's only during the summer, she would need coverage. If she only works two 10-hour days, then it's not required by law, but is recommended.
What About a Nanny From a Service?
Many people assume that hiring a nanny from a service will take care of all the insurance headaches, but that's not always true. “If you use an outside service, make sure there's appropriate coverage,” says Weinheimer. Always ask.
Too Much Hassle?
Does this all sound like a lot of hassle to go through just to have someone help you out? Well, it takes a little time and effort to make sure your policies cover everything, but in the end you're protecting yourself.
“You see value in your insurance when you need it,” says Blizzard. “So it's important you make sure it's right.”
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