As those of us with children get ready to send them back to school, I thought we should touch on the subject of adult children and how some of their insurance coverage works. For those who do not have children, keep reading, some of this could pertain to you as well as we explore the definitions of the named insured, insured in insurance policies and how that plays into everything.
The first thing to consider is the definition of the “insured.” This includes “family members,” which by definition are limited to “a person related to you by blood, marriage, or adoption who is a resident of your household.”
In auto insurance coverage, if someone is living away from home, they no longer meet the definition of an insured. However, they DO still have coverage on the vehicle owner’s policy (typically parents) as a permissive user but are not granted all the coverage of an insured. Some of the things that come into play would include:
- Policy coverage for a rental car will not transfer. No coverage for bodily injury or property damage to others or the physical damage of the rental.
- Being injured in an unrelated accident in another vehicle. The insured on a policy can draw on the medical payments and uninsured motorist coverage for their injuries in these cases.
- Injuries sustained as a pedestrian would also not be covered under the med pay or uninsured motorist on the policy whereas the insured has the coverage.
On homeowners policies, similar things can come into play when you have two unrelated people living together. This could be an engaged couple, college roommates, or friends living together. Again, the definition discussed above comes into play regarding the time they are living in the residence but are not related by blood, marriage, or adoption.
This can create an issue on both the property and liability. For example, John and Mary live together but are not related. John takes out a renters policy for $30K to cover their belongings and has $300K liability. There is a fire at their property which destroys property in John and Mary’s unit. They could probably say that John furnished the place but what about Mary’s personal effects, clothes, computer, etc. They would not be covered. Similarly, let’s say Mary has some friends over and her dog bites one of them. Because Mary is not listed as an insured, the liability coverage would not apply and she would be personally responsible for the injuries.
Bottom line, in all cases, make sure that you have the correct insurance coverage for your current situation. Call your agent anytime for a review to make sure things are set up correctly.
Thanks again for the opportunity to insure your families.
All the best,