Although adult children may be able to stay on a parent's cell phone plan indefinitely, families can't share insurance policies forever. From health insurance to car insurance, each policy has unique rules determining how long adult children can stay on a parent's policy. In this blog, we'll walk you through different coverage varieties and when young adults should start looking into their own policy.
Car insurance
It can be tricky to identify the best time for young adults to obtain their own car insurance because every carrier has a unique set of rules and recommendations.
To ensure the best level of coverage, we recommend young adults secure their own car insurance policy:
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When they're no longer a member of the household
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If the car is solely titled in their name
Young adults should consider where they're living full time as well as whether the address on their driver's license is the same as their parent's address. Once a young adult has moved out on their own, they need their own car insurance policy. Certain carriers may consider college an exception to this rule however, so it's best to reach out to an insurance agent to discuss the best options for your family.
Life insurance and retirement planning
Many young adults don't have life insurance on their mind, but this coverage can provide an important layer of protection to the loved ones of student loan borrowers.
Although borrowers can often secure federal student loans without a cosigner, most private loans require one. Unfortunately, cosigners are left responsible for these debts should the primary borrower pass away before they've repaid their loans.
Life insurance can protect cosigners from the financial burdens of repaying student loans. Fortunately, many carriers offer multi-policy discounts when customers bundle life insurance with auto.
This is also a good time for young adults to start thinking about retirement savings. Read Retirement Preparation for a Stress Free Post-Work Life to learn what areas you need to consider when saving for the future.
Health insurance
Regardless of your health insurance policy, all young adults need to acquire their own coverage beginning at the age of 26. Although health insurance may have the simplest guidelines for when young adults need to secure their own coverage, acquiring a policy can be daunting. We recommend young adults identify their next steps before their coverage is up.
Homeowners or renters insurance
All resident relatives of the household are covered by homeowners or renters insurance regardless of their age. However, this area gets tricky when accounting for children in college. Coverage tends to vary by carrier when young adults go away to college.
While away at school, coverage generally applies until the ages of 23 through 26. For example, some homeowners insurance carriers give coverage until the age of 26 while others cut it off at the age of 23. Additionally, carriers extend coverage to full time college students. Although you might meet the age limit, coverage could be jeopardized if you're not in school full time.
While college students reside in campus dorms, they'll still be covered under their parents' homeowners policy. Once college students begin leasing their own property off-campus, they should acquire renters insurance—even if it's not required by their landlord. Renters insurance often comes relatively cheap, and it provides vital protection for the student and their belongings.
Contact Keller-Brown Insurance
Whether you're still unsure about the best options for your family or you're ready to acquire separate insurance policies, contact a Keller-Brown Insurance agent for guidance. We'll walk through the guidelines of your current policy and help you find the best coverage for the young adults in your family.