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Does My Auto Insurance Cover the Kids After They've Moved Out? (Fall 2008) << Back
 
A child hits the magic age when he can finally drive.  Mom and Dad tell the insurance company about the new driver. Their insurance policy covers him during high school, while he's in college, and while he's back home. At some point, however, he moves out for good. Maybe he moves to a city with mass transit, and his job doesn't pay well enough for him to buy a car, so he goes without.
 
One day, he asks out that girl in the accounting department.  Meeting her at a subway stop just won't do, so he borrows a car from his best friend. He picks up his date, pulls out into traffic, and rear-ends a Lexus.  Flustered, he pops it in reverse and backs into a BMW. Two questions immediately come to his mind: 1) Will she still want to go to the movie? and 2) Does he have insurance coverage for this accident.
 
Bad news: His date takes a cab home and his friend forgot to pay his premium and the insurance company cancelled the policy. Then he gets an idea: It hasn't been all that long since he lived with Mom and Dad. Maybe their insurance will pay.
 
Every insurance policy has a specific description of who will be covered. The standard Personal Auto Policy says that the person whose name is on the policy and any "family members" have coverage for the “ownership, maintenance or use of autos”. Maybe he's in luck.
 
Maybe not. The policy also has a specific definition of the term, "family member:"  The "family member" must be related by blood, marriage or adoption and must also be a resident of the household.  Our driver has moved out of his parents' home, which is why he got the job, met the girl, borrowed the car and had the accident.  Is he still a resident of his parents' household?
 
Chances are the insurance company will decide he's not.  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.
 
Circumstances may change the answer. Courts have recognized that college students, though they live elsewhere, are still residents of their parents' household. A self-supporting child who lives in his old bedroom and pays rent also qualifies as a resident.  It's when the move away from home looks permanent that the break in coverage will occur.
 
Remember to call your insurance professional at AHTKY if you have any questions regarding any of your youthful operators.
   
   
   
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