Congratulations! You sat through school concerts, cheered along sidelines and fretted over homework deadlines, all to enjoy the day when your child walks up on stage to receive their diploma. That day has finally arrived and now is to be celebrated.
Once the celebration is over however there are issues that need to be considered in regard to your own car insurance.
Here is a short explanation for the different scenarios you may face with your new graduate:
Impact on car insurance if child graduating high school and moving out:
If your son or daughter moves out of your home, they should to get their 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 son has his own place, then he is no longer considered a resident of your household.
If your son or daughter typically drives a car that is owned by you and on your insurance, we strongly suggest that you sign the vehicle over to them and have them get their 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 cannot typically insure something you do not own.
Impact on NH car insurance when son or daughter graduating high school and going onto college without a car:
If you child is going onto college they will need to stay as a rated driver on your car insurance. The reason is because coverage can extend to them, even if they are not driving one of your cars on the policy.
A perfect example of this is what 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 is going to a school that is greater than 100 miles away from home, the premium is significantly reduced.
Impact on car insurance if child graduating high school and going onto college with a car:
If your child is going onto college and taking a car with them, be prepared for an increase in your premium. 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 (which is the most expensive town in NH to insure a car.)
The good news is though that your child can still receive the good student credit if they are able to maintain a B average. Be sure to let your agent or company know if they are a good student.
At HPM Insurance, 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.
What happens to my auto insurance if my son or daughter is going into military?
If you 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 will be adjusted. It is suggested that they remain listed on the policy however as, 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 however that coverage for a NH car insurance policy is typically limited to the US, its territories and Canada.
Impact of 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 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. 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.