What Your Grown Children Need to Know about Auto and Property Insurance
By Linda Rey

Empty nester? Congratulations! You’ve done your job. You raised your children, and now they are going to start a new life away from home. But be aware that this situation creates a whole new dynamic on how to properly protect your family.

Your children may not be completely prepared or even terribly concerned about what type of insurance would be suitable in order to protect themselves and their belongings. You may still need to step in and help make sure they are covered by all the necessary insurance.

If you have determined how to structure your insurance portfolio to accommodate for your college-bound children per our previous blog, Three Policies Your College-Bound Child Needs, it’s time to counsel your children on how to structure their own insurance as they move into independent adulthood.

Auto insurance

While your children were living in your home, it might have made sense to keep them on your auto policy. If your children are living on their own, however, it’s probably time for them to fly from the nest and get their own car insurance.

If your child owns an automobile, by law he or she must purchase insurance. The title and registration will dictate how the insurance must be purchased.

When your son or daughter is buying his or her first insurance policy, there may be trouble with “proof of prior.” In some states, if a person has never had auto insurance or has not been included or listed as a driver in the household, an insurance carrier will not credit the account for having prior auto insurance coverage.

It’s of great benefit to have proof of prior, however, because some insurance carriers may give a discount to drivers with it. Generally, these drivers have a tendency to have a better credit score, better payment history and better than average claims experience.

There is a way around this. Talk to your insurance agent and see if coverage under a family policy can count as proof of prior coverage.

Renter’s insurance and homeowner’s insurance

Whether your child will be owning or renting a home or apartment, it’s an extremely prudent decision to secure insurance on his or her premises and belongings. Accidents are called accidents for a reason—otherwise they would be called “on-purpose” incidents, as one of my continuing education instructors likes to joke.

Whether your children rent or own, being properly insured can protect them in case a guest gets injured in their home or if their belongings are damaged. Insurance may help provide alternate living arrangements in case the home is uninhabitable as a result of damage as well.

I deal with so many people who procrastinate because of either not knowing what to do or how to do it when it comes to insurance. Protect your children by teaching them how insurance can provide coverage that will protect them financially.

Linda Rey is a licensed insurance agent at Rey Insurance with a broad spectrum of expertise in life, accident, health, property and casualty insurance as well as retirement planning and college funding strategies.

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