Home boys (and girls) and your insurance
The trend of having "boomerang" kids return home to fill up the "empty nest" shows no sign of slowing down. With millions of young Americans being affected by the sour economy and burgeoning student loan debt, many are migrating back home from college or their own apartments to live with their parents. Or, perhaps they never left.
Key findings of a Pew Research Center analysis of U.S. Census Bureau data show:
- The number of adults age 18 to 31 living at home rose to 36 percent last year.
- That number represents the highest percentage in the last 40 years, and a jump from 32 percent from five years ago.
- In 2012, over half (56 percent) of adults age 18 to 24 lived at home with their parents; 16 percent age 25 to 31 did so.
- Men, however, were more likely to live with their parents than women – 40 percent of males age 18 to 31 lived with mom and dad compared to 32 percent of females.
This last data point has spurred a lot of speculation ranging from higher college graduation rates among young women translating to increased employment opportunities compared to men, to gals being more mature, to the tendency of some parents to coddle sons more than daughters.
Regardless of their gender, having an adult child return home can impact your car insurance rates. You should add your boomerang kid to your auto policy if he or she will be driving your car regularly to ensure sufficient coverage and to avoid claim denials down the road. This will also allow your insurer to take into account any discounts – or surcharges – that may apply.
If your child is returning home with a car he or she owns and insures, you should have your kid contact the insurance company and let it know that the vehicle will be garaged at a new address, which could adjust the premium up or down, depending on the locations.
On the other hand, having your child return home typically has minimal impact on your homeowners insurance policy. As a family member, the child's possessions are covered under your policy.
However, if your child owns a lot of valuables -- expensive electronic s or musical instruments, for instance -- you might need to buy an endorsement for sufficient coverage. Without an endorsement, many homeowner policies limit coverage for valuables to $1,000 to $2,000.
Health insurance is another concern with your boomerang child. Under the recent health care reform act, adult children can be carried on a parent's health insurance policy until age 26. This makes sense if the child is unemployed or self-employed, but could even be a wise move if he or she is in good health and working at an entry-level job and paying a high premium for coverage through the employer.
Des Toups is a writer, editor and expert on insurance, cars and personal finance. He has written extensively about all three for national publications such as MSN and major newspapers such as the Seattle Times. He has been quoted about insurance issues in The New York Times, USA Today and Kiplinger's.
Follow him on Twitter @destoups