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Boomerang kids and car insurance
8/13/2013 4:42:00 PM
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 says.
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 record.
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.
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 members.
Penny Gusner is a consumer analyst for CarInsurance.com.