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Insuring Your Millennials as They Leave the Nest

By March 19, 2019April 2nd, 2020Auto Insurance

Each May, parents all over are celebrating the fact that their child has graduated from college and is about to start a full-time job. Many of these same parents can’t wait to get their children off their personal insurance policies as well, and we get it! However, there are some things to consider as your millennial takes over his or her insurance coverage. Here are our suggestions of what to think about as you and your millennial begin to make the transition.

Auto Insurance

  • Whose name is on the car title? Insurance follows the car, which follows the title. If your child’s car is titled in your name, you must go to the DMV and change the name on the title before the child can have an insurance policy in his own name. (This will also mean your child will be responsible for state property taxes and registration costs.)
  • Is your child moving to a different state? If so, he or she will need to get a driver’s license, registration, license tag, and insurance in that state.
  • Will your child be given usage of a company car? If so, is the permitted usage for work and personal use, or work only? You will want to check with us to be sure they have adequate insurance coverage in both scenarios.
  • Are you keeping your child on your auto policy for a few months? If so, remember to call and let us know that the garaging location of your child’s vehicle has changed.
  • Does your child drive a newer car? Repairs are costly, so be your child carries both comprehensive and collision coverage.  Check the deductibles as well.
  • Does your child know the maintenance schedule on the car?  Click here for a maintenance checklist created by Traveler’s Insurance. Regular vehicle maintenance can cut down on automobile claims.

Home or Renter’s Insurance

  • Are they renting an apartment or condo? Buying a home? Be sure they have enough insurance coverage whether renting or owning a home.  While some apartment complexes offer renter’s insurance, this coverage may not offer water backup or provide coverage for personal property such as flat screen tv’s, computer equipment, or other expensive electronics.  Let us provide you with some options.
  • Would your child be able to replace all their personal belongings at once, from memory and on their own dime, if his or her living space was damaged? We recommend making an inventory of their belongings (and value) to be sure they have enough insurance coverage to replace their belongings in the event of a disaster.  At the very least, make a video of each room and the contents to have a record of all belongings.

Additional Insurance Recommendations

  • Storing (and Insuring) the “Stuff”- So what do you do with all the stuff your child has acquired over the 4-5 years at college? If you rent a storage unit, should you purchase the coverage that the storage company offers? Typically, your home owner’s policy provides a percentage of contents coverage towards a unit. But we highly recommend you call us to verify that you have enough coverage for the contents. In order to avoid buying the coverage offered to you by the storage company, you may need to provide proof of insurance, and we are happy to help.
  • Consider Using the same Insurance Company for Multiple Policies – Many insurance companies will reduce your rates if you purchase two or more types of insurance from them, such as your auto and home or renter’s policies. This also offers the convenience of having just one insurance company to contact if they have questions about their policies.
  • Health Insurance – Under the current law, you can add or keep your children on your health insurance policy until they turn 26 years old provided that your plan covers children. “Under-26” coverage ends on your child’s 26th birthday.

Final Thoughts

  • Remind your child to establish credit now and pay their bills on time. Did you know that insurance rates are based on many things, and of those is your credit score? Does your child have any credit? If not, you might consider advising them to get a credit card that they pay off every month to help establish good credit.  Insurance companies often consider credit histories when setting their rates and rely on credit bureau information when creating their own credit-based insurance scores for consumers.  A good way to improve your credit history is to pay your bills on time. Under federal law, you can obtain one free credit report each year from each of the major credit bureaus. Review your credit reports carefully to make sure they don’t contain errors.
  • How do you handle your child’s cell phone? Most likely your child has been part of your family plan, so his or her monthly charge may be much less per month that if they were on a plan by themselves. One of our employees suggests that you call your carrier and ask them to break out the cost per person on your plan. You might want to keep your child on the family plan for a while but charge them for their cost per month. Our employee did this and put the payments from her child into a separate account to use for unexpected expenses (like when her child had to get a new tire).  It may also be worth your child checking with his or her employer to see if they offer a group discount rate on cell coverage.

The main thing to remember is that you have done a great job for last the 20+ years of raising your millennial child. Now that they are striking out on their own, we hope that some of the suggestions above can ease the stress of helping them wade into the waters of adulthood! We are happy to help with any questions you may have, so just give us a call or contact us.

Good job Mom and Dad!