Congratulations! You sat through school concerts, cheered along the sidelines, and fretted over homework alongside your child, all to enjoy the day when they receive their diploma. That day has finally arrived, and now it's time to celebrate.
However, once the celebration is over, some important issues need to be considered regarding your car insurance.
If your son or daughter moves out of your home permanently (and not just goes off to college), they should get their own car insurance. The reason is that most auto policies extend coverage to family members who are "related to you by blood, marriage or adoption who is a resident of your household."
If your son has his own place (besides a college dorm), then he is no longer considered a resident of your household. (Please note that there is a difference between moving out to college versus moving out permanently.)
If your daughter typically drives a car owned and insured by you, it is advised you sign the vehicle over to her and have her get her own insurance. This is especially true if she lives outside New Hampshire and you have a NH auto policy. It is essential that vehicle ownership and insurance match in every case; otherwise, there could be a coverage issue should a claim occur. You cannot typically insure something you do not own.
If your child is going onto college, they will need to stay as a rated driver on your car insurance. The reason is that coverage can extend to them, even if they are not driving one of your cars on the policy.
A perfect example of this happened to my friend, Dave, while he was a student at UPenn. He did not have a car with him but was rated on his mother's NH car insurance policy. While walking down the street, he was hit by a car, which then fled the scene. Dave's injuries were covered by the medical payments and uninsured motorist coverage on his mother's policy.
The good news is that if your son or daughter goes to a school more than 100 miles away from home, the premium is significantly reduced.
If your child is going onto college and taking a car with them, be prepared for a premium increase. If the college is within NH, the car will most likely be rated in the city or town of the school. If the school is outside of New Hampshire, many companies will rate the car as if garaged in Manchester, NH (the most expensive town in NH to insure a car.)
The good news is that your child can still receive a good student credit if they can maintain a B average. Be sure to let your agent or company know if they are a good student.
If your son or daughter is going into the military, let your insurance agent or company know. The company typically understands that their usage will be minimal, and your premium may be adjusted. It is suggested they remain listed on the policy because your child may be entitled to benefits if needed while in the US (say while on leave or off base). However, please note that coverage for an NH car insurance policy is limited to the US, territories, and Canada.
If your son or daughter does not have any immediate plans to leave home and all cars are registered in your name, you do not need to make any changes to your policy.
As they get older, you may consider signing one of the cars over to them. You may want to time this with the renewal of the vehicle's registration. If you do this, remember that your child would need their own insurance as vehicle registration/ownership and insurance must be the same.
Those are just a few of the scenarios we see at HPM Insurance. So if your child is graduating, congratulations, and give your local insurance agent a call. They are there to give you advice on how to protect you and your family best.