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Bruce Sackrison

Bruce Sackrison is a Napa Valley Register columnist who will write about property and casualty insurance matters.

Kids are home from college. So are their cars. What do you need to know?

According to Pew Research Center, a third of 25-29 year-olds live at home with mom and dad, or grandpa and grandma.

So, you aren’t alone.

A lot of kids are also returning home from college, and their length of stay at home is questionable. Maybe they just need a few months to “get it together” and then they’ll be on their way. Maybe they’ll stick around for a while.

Let’s talk about a few of the car insurance implications of adult kids at home.

Graduate Greg

Greg is 25 and has been away at college out of state for the academic year. He’s home now, newly graduated. Greg’s dad removed him as a listed driver last fall, at the recommendation of his local agent. He could do that because Greg was more than 100 miles away at school, full-time, and did not have his own car. Greg’s dad saved a lot of money on his car insurance by dropping Greg from his policy.

Now Greg is home. Maybe to stay a while.

Greg’s dad needs to add Greg back onto his auto policy as a listed driver.

Doing this will, of course, raise the premium, but it’s required by most auto insurers in this situation. If he isn’t added back to the policy, and there’s an accident, the policy could be canceled.

Dormitory Daisy

Daisy is 19 and home for the summer. She is enrolled to go back to college next fall. Mom and dad want to buy her a used car for her sophomore year. It will make her life easier, and she’s earned it.

Daisy’s parents should consider titling the car in their name or co-titling the car with Daisy.

Why?

Because it will be far less expensive to cover Daisy’s car under mom and dad’s policy, and that can usually only be done when mom and dad are owner’s (or co-owners) of the car.

Things to consider

When it comes to adult children and car insurance, there are a few things to remember. Important things.

First, insurance companies care, a lot, about who is living at home with access to your car. They could cancel a policy if they find out after the fact that someone who should have been listed as a potential driver was not.

Second, there is a thing called “insurance interest” that usually applies to car insurance. It means that normally, you cannot insure what you do not own.

Finally, the upside for you to add you adult kid’s car to your policy is saving on premium. But downsides exist too. If they have an accident, your rates will go up. Significantly. Also, the car will need to be at least co-titled to you, and they cannot make decisions on their own about what type of coverage to carry. It will be your car and your policy.

My advice

An adult child living at home creates a unique insurance situation that requires a unique solution. Don’t assume that your insurance is adequate. Always check with your local agent.

As always, if you don’t have a local agent to run this by, please feel free to call or email me.

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Bruce Sackrison is an insurance property and casualty broker affiliated with Professional Insurance Associates. He is at 707-931-0186 or bruces@sackifs.com.

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