VRP Insurance asks a question? Can grown kids rely on Mom and Dads LI Car and Homeowners Insurance to protect them ?

Long Island Insurance customers may think  An adult son or daughter  is insured from mom or dad’s homeowners or car policy. It usually isn’t and finding this out after a loss makes matters much worse. Policies are typically clear. A relative is covered, but only if the relative is a full-time resident of the named insured’s household. Even if the nonresident child lives in close proximity, the parents’ policy is not going to insure the childs personal belongings.

Insurance contracts are meant to handle sources of loss that can be easily identified. Person A’s cars or home is protected by Person A’s auto or homeowner policy. Imagine if that weren’t the case.

Example: The Pesce’s Holbrook home and cars have been insured by Merchants Insurance for 10 years. In the last five years, the Pesce’s children have grown and moved out.  The existing home and car insurance in New York policy was meant to cover the original exposure for the family’s two cars and one homeowners policy.  The insurance premiums and two policies that covered the original family’s two cars and one home, now cover the original home and cars PLUS the following:

  • The sons apartment and car
  • The Daughters home and two cars
  • the older sons home, and two cars
  • the step daughters apartment and car.

Besides covering all of the property, the parents’ policies cover everyone’s personal legal liability in addition.

While this may be a way to keep insureds costs down, the Insurers are not getting the appropriate premium for the risk which causes loss ratios to increase,  resulting in rate increases for everyone !

Having your own Insurance

Although many young adults starting out have limited assets to insure, there is still an exposure for liability that can cause an ever lasting negative financial black cloud that can even include loss of future earnings when accidental damage is caused to other people or their property.

If you have any questions about your existing policy, are inquiring information about a possible future policy or need further information, please call us at (631) 738-7300 or get a quick quote at www.vrpinsurance.com

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September 18th, 2012 by VRP Insurance Agency