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Are you one of those families where you have children who have moved out of your household but for financial support reasons you have allowed them to continue to use one of your personal autos? If so, you need to be very carefull when doing this because coverage very likely will be reduced for that child in certain claim situations. In layman terms here is why:

- While she/he was a member of your household they typically fall under the definition of "family member" which allows them the more broad coverage of insured in your household.

- When they live on their own but are using your vehicle they tend to lose the definition of family member and are now considered "permissive user" of the vehicle.

Here's a situation that could happen to your child: Your son has moved out, but short of funds you are helping him out by allowing him to use one of your cars. You keep that car insured on your auto policy. While he is out jogging he is struck by an vehicle and worse yet the driver is uninsured. The short summary of this is while in the parents household he should have been covered under both medical and uninsured motorist coverage subject to the policy coverage, conditions and limits. BUT, as a permissive user they don't qualify for these coverages under the parents policy. Yes, if he is hurt while driving the parents vehicle as a permissive user the medical and Uninsured Motorist coverage would likely apply if coverage was in place, as a pedestrian coverage is not there.

Former Family members typically no longer have the following coverages under their parents policy:

- liability while in an auto other than the parent's "your covered auto"

- Medical payments while in any auto other than the parent's "your covered auto"

- Medical payments while a pedestrian

- uninsured motorist while in any auto other than the parent's "your covered auto"

- Uninsured motorist while a pedestrian

These coverages are extremely important coverages and there are solutions:

1. purchase an auto policy for the child and have the named non insured endorsement which will give some of that coverage back. This endorsement is meant to offer coverage in a case where there is no actual car to insure.

2. Title the car to the child and have the insurance written in their name. Yes price will be more in most cases than having the vehicle on your policy, but in the end insurance is about protection more so than price. Of course the concern here is your child gets title and then goes out and buys the "cheapest" insurance they can get away with and their coverage is diminished for the sake of "cheap" price. BE VERY CAREFUL to eithere counsel them or send them to us so we can get them pricing with limits of liability similar to yours.

Posted 12:00 PM  View Comments

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