When should your child get their own policy?
For most of us, the school year has drawn to a close. The last two years have been unprecedented for our entire world. But we have all powered through and can see a light at the end of the tunnel. With that, my focus - as I'm sure many of yours has as well - turned back to the next year and what that means for my children. Each year as my oldest inches closer to adulthood (or what we presume to be adulthood because really, when does a teenage boy become an adult?) I try to plan a bit ahead in different areas of life each year older will effect.
So, just as I planned for when I had to add him to my insurance policy, I look towards the light when I can take him off even though it seems far, far away. A pin light, really, but it's there. Looking forward I realize it could be quite a few more years past the 18 year mark. Granted, he keeps telling me that he's out when he turns 18 and I've offered to help pack his bags. We all know I'll feel different when that time really comes (if it comes). But, it brings up many questions such as "When should my child get their own policy". Honestly, it's different for a lot of people.
There are factors to consider that will help you make that decision. Things such as are they going to college? If they are, will they be commuting from home or moving during the school year? Will they be taking a vehicle with them or not? Or are they forever going to live in your basement and never leave (I fear this). Or will they move out and start their lives at 18. All this will play a part in deciding when and what's best for you and your child.
First, let's start with college. If your child is a college student, whether commuting or going away to school, they can remain on your policy. There may even be some discounts available. If they forever live in your basement? Well, if they are a licensed driver in your household, they need to be listed on your policy. And things are a bit different if they forever live in your basement but carry their own policy.
Now let's talk about that daring 18 year old who moves out right after high school and is going to try it on their own. Kudos for sure to both you as a parent and the child! But when they are no longer in your household, guess what? You can no longer insure them on your policy. That's right, Kiddos. Helllloooo responsibility!
So this will change a few things. Such as: Are they taking a car that you have on your policy? If so, who is that car titled to? The reason this is questioned is because if the car is titled to you, but they are taking it when they move - you're caught in a catch 22. You can no longer insure them because they aren't in your household. But if the car is titled to you, they cannot insure it because they do not have what we refer to as an "insurable interest" in that auto. Best answer? Retitle the car in their name.
The reason I bring this up is simple. If you insure your child who is no longer in your home and there is a loss, your insurance company could deny the claim. And that's no good for any party involved. And the 2nd half of that is that insurable interest. You cannot insure something you do not have an insurable interest in. So if they insure that vehicle that you wonderful parents let them take, but it's still in your name? Again, the company could deny the claim because the child has no insurable interest in the auto.
I know, I keep saying "insurable interest". What exactly is insurable interest? A person or entity has an insurable interest in an item, event or action when the damage or loss of the object would cause a financial loss or other hardship.
Clear as mud, right? Best thing to do would be to call your agent. Sit down and discuss what your unique family dynamics are. Let us walk you through the do's and don'ts as you usher your child out into the crazy world. That's why we are here. Protecting What's Important to you and your family. Let's make sure that they and you are fully protected.