Insurance Needs Change as Economy Forces
More Young Adults to Move Back in with Parents
WASHINGTON—Layoffs and a dearth of new job openings continue to add to the high rate of unemployment, leaving an increasing number of new college grads and young adults unable to make ends meet.
sure it adequately reflects the new living arrangement.
Limits — In many states, a parent’s health insurance can now cover young adult children through their late 20s to help dependents without employ-er-sponsored health insurance or the financial ability to purchase individual coverage. Consumers should reach out to their state insurance department to learn more about how their state laws affect their coverage.
Left with limited options, many are moving back home with Mom and Dad — an increasing trend that creates important insurance consequences for these so-called “Boomerangers” and their parents to consider.
Didn’t See It Coming
“In this economic environment, many
young adults and their parents are
finding themselves in a position they
never expected,” said Jane L. Cline,
president, National Association of In-
surance Commissioners (NAIC) and
West Virginia Insurance Commission-
er. “A grown child moving back home
can create insurance implications that
must be considered carefully and un-
derstood to ensure [that] everyone
stays protected.”
As part of the review process, families
might find they can save money by
combining existing insurance policies.
For example, young adults renting
before moving back home no longer
need renter’s insurance; instead, they
could potentially be added to the ho-
meowners policy. However, they need
to be sure that their parents’ hom-
eowners policy has a broad enough
scope to include them as “insured.”
Additionally, young adults might need
additional coverage if the move back
home forced them to rent a storage
locker for their belongings or if they
have big-ticket items, like jewelry, ex-
pensive electronic equipment or oth-
er valuables that may require coverage
beyond what their parents’ homeown-
ers policy has currently.
Explore Alternative Options for Insurance Coverage — If young adults don’t qualify for a parent’s policy, these other options can be considered to make sure they stay protected.
• Alumni Associations: University alumni associations can be a resource for cost-effective insurance plans — health, auto, life — but this might require application within a set period of time after graduation and perhaps membership in the alumni association.
A recent Pew Research Center study found that, in the past year, nearly 13 percent of parents with grown children have had at least one of their adult sons or daughters return home to live for financial reasons.
Saddled with college loans and unexpected job loss, these young adults are forced to live at home until they can find a job and get their finances back on track.
Auto insurance coverage is another important consideration. Does the young adult have his or her own car that needs to be added to the parent’s policy? Or does the young adult need to be added as another driver of an existing family vehicle? The good news is parents can keep any member of the family on their auto insurance policy as long as that person lives in the same house. But rates may increase, so parents should look for discounts such as those given for multiple vehicles, multiple policies (homeowners, life, health, disability), anti-theft devices, and good driving records.
•;State;Insurance;Pools:;Many;states have insurance pools that guarantee coverage to people rejected by private insurers. It also can provide a way to continue insurance coverage for those who exhaust COBRA benefits. To see if your state has a health insurance pool, check with the state insurance department.
•;Industry;Associations:;Many;profes-sional groups and associations also provide members access and preferred rates. If part of an industry group, check with the organization to see what benefits are available.
To Do Suggestions The NAIC recommends that families who find themselves part of this new phenomenon consider the following.
Review Your Insurance Policies — A
move back home provides the perfect
opportunity to review existing health,
home, and auto insurance coverage
for both parents and children to en-
Parents should discuss the situation
with their insurance agent to deter-
mine what level of coverage their family
needs. Young adults can visit the NA-
IC’s dedicated section for young singles
on Insure U: www.insureuonline.org/
course_singles.htm to learn more.
Formed in 1871, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and five U.S. territories. The NAIC has three offices: Executive Office, Washington, D.C.; Central Office, Kansas City, Mo.; and Securities Valuation Office, New York City. The NAIC serves the needs of consumers and the industry, with an overriding objective of supporting state insurance regulators as they protect consumers and maintain the financial stability of the insurance marketplace.
10 FEBRUARY 25, 2010 • THE INSURANCE RECORD
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