Starting a pandemic pod? One money move you might forget

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Hanna Horvath, CFP®

Hanna Horvath, CFP®

Managing Editor & Certified Financial Planner™

Hanna Horvath, CFP®, is a certified financial planner and former managing editor at Policygenius. Her work has also been featured in NBC News, Business Insider, Inc. Magazine, CNBC, Best Company, and HerMoney.

Published December 2, 2020 | 4 min read

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With the fall school semester nearing its end and coronavirus cases rising, most parents are preparing for another virtual spring. Some are turning to pandemic pods: small, self-contained groups of families pooling their resources to allow their children to learn together in a smaller classroom setting.

Should you join a pod? Here's what to know.

But creating a pod isn’t as easy as agreeing on a time and place to get together. If you’re hosting or are considering hosting a pod, you need to consider factors beyond the coronavirus itself. Teachers and students can injure themselves while in the pod, posing an insurance liability many parents aren’t aware of, and that typically isn’t covered by homeowners insurance.

“It’s just not top of mind right now,” said Shauna Causey, founder and CEO of Weekdays, a start-up that helps form pods. “A lot of parents and educators are doing all this for the first time and overlook how important insurance is.”

Does standard homeowners insurance cover pandemic pods?

No. To insurers, a pandemic pod is a daycare. Daycares are businesses, and businesses are typically not covered by standard homeowners insurance policies.

While contracting COVID-19 is a serious risk when hosting a learning pod, insurers will likely be more concerned with accidents happening inside the home, said Adam Scales, professor of insurance law at Rutgers University. It’s much easier to prove that someone fell down the stairs and broke their arm in the pod than it is to prove they caught COVID.

Adding a rider to your existing homeowners policy is relatively inexpensive, said Scales. Buying a new business insurance policy outright will cost much more.

“There’s probably a million OSHA (Occupational Safety and Health Administration) violations in these homes. Insurers are not going to be clamoring to write off these policies,” said Scales.

Parents may think to ask pod members to sign a liability waiver. But simply signing one is not enough, Scales said: “They are not these get out of jail free cards.” He says parents should get additional insurance to cover the increased liability and split premiums costs with the rest of the parents.

“If you make sure there’s buy-in from everyone, you’re proactively managing the risk,” he said.

If you base your pod in your home, you should be able to add an additional rider to your homeowners insurance policy to cover these risks.

To find a policy that works for your situation, contact your insurer about your homeowners insurance policy. They may be able to explain what it already covers or help you purchase additional insurance. Policygenius can help you compare homeowners insurance policies here.

How parents are keeping their pods safe

Causey created her company in January to help kids get more personalized instruction in neighborhood groups. Weekdays’ platform helps educators connect with parents and set up learning pods. The company also helps with payments, licensing and insurance. When the pandemic struck, there was a “massive pause in the industry.” But a few months into lockdown, the calls came rolling in.

“We started hearing from hundreds of parents a day. We have a waitlist now of 8,000 parents and hundreds of educators trying to set up pods. We’re just working as fast as we can at this point,” said Causey.

The “vast majority” of parents are focused on keeping their children enrolled in public or private school, Causey said. Most pods her company sets up are for a group of kids learning online with an adult there to supervise and provide additional instruction. Most pods are hosted in a parent’s home, typically a converted living room or basement. This poses additional risks, which Weekdays helps mitigate.

“The parent just wants peace of mind,” she said. “They want to know that their kids are protected.”

Laura Rizkallah wanted to form a pod in her community, but she didn’t want the risk and exposure of hosting at her home. The 46-year-old mother of six decided to rent a building in downtown Corning, New York, to host 30 kids. Rizkallah said they hired a couple of facilitators to help while the kids learned virtually. Rizkallah formed a limited liability company and created her own waivers to provide legal protection for the pod. She also bought business insurance.

“The insurance part was so tricky,” she said. “Most insurance companies had no idea what a pod was and had never been asked to insurance anything like this. We’re all in the same situation right now, from the pod host to the teacher to the insurance company. We are all trying to solve the same problem.”

So far, Rizkallah’s pod has been successful and she plans to continue it through the school year. As long as the future of in-person classes remains uncertain, learning pods, and all their challenges, are here to stay.

“They were a trend before the pandemic started, but have really accelerated into the national spotlight,” said Causey. “We really don’t know when there’s going to be a return to normal, so I truly expect these pods to be the future.”

Learn how parents are adapting to child care and work during COVID-19.

Image: MoMo Productions