A just-released analysis of 2012 Census data reveals that 36
percent of young adults age 18 to 31 were living in their parent's
house, up from 32 percent five years ago.
That's 21.6 million young people, the Pew Research Center
Some of those young adults have never left home, of course. But
many are boomerang children who left the nest and returned. Some
parents may welcome them back, and others may be reluctantly giving
up the bedroom they just converted to a home gym.
Either way, parents of boomerang kids may need to readjust their
car insurance, too.
An adult child living in a parent's home is more likely to be
male than female, the Pew researchers found, and more likely to be
under the age of 25 as well. That means the car insurance
consequences could be expensive.
For example, we compared
car insurance rates
for a Denver couple driving a 2012 Toyota Camry and a 2008 Honda
Pilot, with clean records and 100/300/50 liability limits, plus
comprehensive, collision and medical payments. By themselves, the
couple would pay $3,412 a year.
With a 22-year-old son moving back into the home and driving
their cars occasionally, that rate rises to $4,994. It would be
much, much worse if the child had an accident or tickets on his
Time to revise car insurance
Car insurance companies ask -demand, really - to know who is
living in your household and driving your cars.
If your children went off to college, your auto insurer may have
let you take them off your policy temporarily, requiring you to add
them back on when they returned for long breaks.
If your child never returned home from college or moved out into
his or her own residence, then you probably had the child
completely removed from your policy.
But when a child returns to your household, your car insurance
company needs to be notified and policies reviewed.
- If your child owns a vehicle and auto policy of his or her
own, your car insurance provider will typically require a copy of
the child's policy. You then won't have to add your
boomerang child back on your policy. Most insurers assume
that if the child has a vehicle that is what he or she will drive
a majority of the time and thus won't mandate you to add the
child back on your policy as a driver.
- Your child will need to inform his or her insurance provider
of the change of address. A new location may cause a rate
change (higher or lower depending upon the rating system).
And as with your insurer, it's unlikely you'll need to be added
to your child's auto policy if you have a vehicle and policy of
- If your child does not own a vehicle, then you'll need to add
the child back on your auto insurance policy if he or she is
licensed. Depending upon your child's age and driving
record, this may cause your rates to rise.
- If your child has a bad driving record, especially something
as serious as a DUI, and won't be driving your vehicles ever,
then you can see about excluding him or her from your policy so
that your rates won't skyrocket.
Forgetting to inform your car insurance company about your
child's return and use of your vehicles could result in claims
being denied in the future and even your policy being canceled or
non-renewed for misrepresentation of licensed household
Penny Gusner is a consumer analyst for CarInsurance.com.