So your son or daughter just moved out on their own, congratulations! That is a huge accomplishment for you as a parent and for your independent adult-child. You did your job raising your child to be ready to face the real world.
Now that they are on their own, there’s nothing wrong with helping them out once and a while by paying for groceries, helping to furnish their apartment etc. -there’s no doubt that they appreciate the help. But, did you know that allowing them to remain on your auto insurance could cause them more financial stress than help if they were in an accident?
Why does your child need their own auto insurance once they have moved out?
Under most personal auto policies, the definition of an “insured” includes “family members.” While child is a family member by any other definition, in the world of insurance family members are limited to “a person related to you by blood, marriage or adoption who is a resident of your household.”
So, now that your child has moved out and is living on their own, they no longer meet the “family member” status and the vehicle is no longer insured on your policy. You may have them listed as a “permissive user” on your insurance, but this can still leaves a lot of gaps in coverage.
Here are 3 Instances in which your child who has moved out won’t be covered by your auto insurance:
- Let’s say your son borrows his roommate’s truck to run a quick errand and accidentally rear ends another vehicle and causes minor injuries to the other driver. Your son won’t be covered with liability coverage for the other driver’s injuries or for the property damage to the other vehicle.
- It’s summer and your daughter and a few friends have decided to rent a vehicle to take a cross country roadtrip. She decides not to buy rental insurance from the rental car company — she won’t be covered for any property damage if there is an accident.
- If your son is driving with a friend who doesn’t have insurance and gets in an accident, he won’t have any medical coverage for his injuries from the car accident.
Your Grown Child Needs Their Own Auto Insurance Policy
Without coverage from their own auto insurance policy, your child will have to pay any expenses related to an auto accident from their own pocket and you may have to help. It’s in your child’s best interest (and your pocket book’s best interest) for your child to have a personal auto insurance policy in his or her own name. They’ll have the protection they need and it could prevent potential financial difficulties that could easily follow an accident.