Does My Auto Insurance Cover The Kids After They’ve Moved Out?
Parents of teens and young adults know the pattern all too well. A child hits the magic age when they can finally get a learner’s permit to drive. After multiple tries, they pass their driving test and get their drivers license. Mom and Dad open their wallets and tell the insurance company about the new driver. Their New York auto insurance policy covers them during high school, while they’re in college, and while they’re back home. At some point, however, they moves out on their own for good. Maybe they moves to a city with convenient mass transit, and their job doesn’t pay well enough for them to buy a car, so they go without auto insurance.
Every insurance policy has specific descriptions of who the insurance company will cover. The standard Personal Auto Policy published by the Insurance Services Office says that the person whose name is on the policy and any “family members” have coverage for the ownership, maintenance or use of any auto.
Or the policy also has a specific definition of the term, “family member:” A person related to the person named on the policy. The family member must be related by blood, marriage or adoption and must also be a resident of the other person’s household. Chances are, the insurance company will decide he’s not, and it may have the law on its side.
A California court ruled in 1975 that an adult son who lived in a separate apartment on his parents’ street and who relied on his parents for financial support was not a resident of the parents’ household and not entitled to coverage under their auto insurance.
Circumstances may change the answer. Courts have recognized that college students, though they live elsewhere the majority of the year, are still residents of their parents’ household. A self-supporting child who lives in her old bedroom and pays rent to her parents also qualifies as a resident.
It’s when they move away from home looks permanent that the break in coverage may occur. Even if they do not own a car, they should consider buying an auto insurance policy with a special coverage called Named Non-Owner Coverage. This will cover them for liability for injuries or damage they may cause while renting or borrowing a car. Coverage will apply after other available insurance (such as the car owner’s coverage) is used up.
It could have saved them a whole lot of money.
