Congratulations! You have sat through the school concerts, sat along the sidelines and fretted over homework deadlines to enjoy the day when your son or daughter walks up on stage to receive their diploma. That day has finally arrived and now it should be celebrated.
However, once the celebration is over, there are issues that need to be considered in regards to your own car insurance.
Here is a short explanation for the different scenarios you may face with your new graduate:
Graduating high school and moving out:
If your daughter moves out of your home, she needs to get her own car insurance. The reason is because in an auto policy, coverage is extended to a family member who is "related to you by blood, marriage or adoption who is a resident of your household."
If your daughter has her own place then she is no longer considered a resident of your household.
If your daughter typically drives a car that is owned by you and on your insurance, we strongly suggest that you sign the vehicle over to her and have her get her own insurance. It is very important that vehicle ownership and insurance match in every case; otherwise there could be a coverage issue should a claim occur. You can not typically insure something you do not own.
Graduating high school and going onto college without a car:
If your son is going onto college, he will need to stay as a rated driver on your car insurance. The reason is because coverage can extend to him, even if he is not driving one of the cars on your policy.
A perfect example of this is what happened to my friend, Dave, while he was a student at U Penn. He did not have a car with him, but was rated on his mother's car insurance in NH. 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 is going to a school that is greater than 100 miles away from home, the premium is significantly reduced, (but unfortunately UNH is not 100 miles away from the Milford area).
Graduating high school and going onto college with a car:
If your child is going onto college and taking a car with him or her, be prepared for an increase in your premium. If the college is within NH, the car will 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 it is garaged in Manchester NH (which is the most expensive town in NH to insure a car).
The good news though is that your child can still receive the good student credit in college if they are able to maintain a B average. Be sure to inform your agent or company if your child qualifies for this credit.
At Holt Proctor McBriarty Insurance Agency we do not recommend having your college student register a car in NH, bring it to a school out of state, and then try to insure it in NH on their own. For a single-vehicle policy, the car should be registered and insured in the state where it is garaged.
Graduating high school and going into the military:
If your son or daughter is going into the military, let your insurance agent or company know. The company understands that their usage will be minimal and your premium will be adjusted. It is suggested that he or she remain listed on the policy however, like the example of Dave above, your child may be entitled to benefits if needed while in the US (say while on leave or off base). Please note that coverage for a car insurance policy is only applicable while in the US and Canada.
Graduating high school or college and living at home:
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 him. 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 Holt Proctor McBriarty Insurance Agency. To learn about the issues your son or daughter need to consider regarding their own insurance, please read, and send them the link to, What Graduates Need to Know About Insurance. If you child is graduating give your local insurance agent a call. They are there to give you advice on how to best protect you and your family.
As all parent know, we still worry about our kids no matter how old they become. Make sure you and them are getting the best protection at the best price possible