How Do You Insure Adult Children or Family Members Out of The Home?

Before we all hunker down for the winter, I wanted to take a moment to discuss something that has come up multiple times in the past few weeks in our agency. It has to do with insuring your adult children or other family members when they are out of the home. There are many factors that go into determining coverage and how to do it correctly.

When your kids first go away to school or maybe your parents move in with you, questions arise about personal liability and personal property coverage. The definition of who has coverage under a homeowners policy as an “insured” is limited to “residents of your household who are your relative” and further extends away from the home for “a student enrolled in school full time, as defined by the school, and is under the age of ___” (varies by carrier from 24-29 years old).

Many children now attend college beyond the ages of 24-29 years old. Sometimes it’s because the child is working toward additional degrees. Maybe the child is working while going to school, so it may take longer to graduate. Regardless of the reason, if a child is beyond that age, doesn’t have full-time student status, or is living away from home, it can instantly create a gap in their coverage for all their contents and personal liability insurance.

On the auto insurance side, the key is remembering that the insurance runs with the titled owner of the vehicle. Gaps can present themselves when your family member has a vehicle but lives outside the household. They lose some pieces of the coverage because they no longer fit the definition of an insured. Under a personal auto policy, the definition of who has coverage includes "family members." Family members are limited to “a person related to you by blood, marriage, or adoption who is a resident of your household.”

A vehicle that is titled and insured by the parents but in possession of a child who isn’t a resident of the parents’ household creates a gap in coverage for a child who rents or borrows a vehicle, as well as one who is injured as a pedestrian or while a passenger in another vehicle that doesn't have enough insurance coverage. If a vehicle is co-titled or titled solely to the child, but the child isn’t properly listed as an "additional insured" or "named insured," that can also create a gap in coverage.

Here are some examples when adult children would NOT have coverage because the definitions stated above don’t apply:

• Your child borrows a friend's truck to pick up furniture they purchased and causes injuries to someone crossing the street. Your child didn’t know the friend had no insurance on the truck. Now your child has no liability coverage for the injuries they caused.
• Your child rents a vehicle while on vacation and doesn't buy the insurance offered by the rental car company. Again, there’s no coverage for property damage to the rented vehicle or bodily injury to others if there’s an accident.
• Your child is hit by an uninsured motorist while walking across the street. There are no medical payments or uninsured motorist's coverage for his or her own injuries.
• Your child is at a concert and accidentally bumps someone off the edge of the stadium bleachers causing severe injuries. There’s no coverage for the injuries caused to that person.

Always be sure to contact your insurance agent with current information about your child’s age, student status, and address to determine if they have the coverage they need. This will ensure, at the necessary time, that your child will avoid these insurance gaps and have the proper coverage in his or her own name. Without the proper insurance protection for injuries and damages, they risk personal financial devastation for many years to come.

Thanks again for allowing us to protect your families,

Jon