My daughters, and many of my close friend’s children as well, are reaching that age of liberty where they set out on their own to carve their own path. Many joke that they never really leave and it also seems that many parents are not ready to give up supporting their children as long as they can in certain areas (cell phone bill perhaps?).

One very dangerous area of freedom meeting financial jeopardy is with your family auto policy. When a child leaves the nest to find a new job and get their own apartment, they immediately lose some valuable auto insurance protection under their parent’s family policy. By definition, the child is no longer a “household family member”. So where yesterday they had coverage, today they don’t! It seems many are not aware of this loss of coverage in the middle of a policy term. (A policy that has already been paid thru the year and rated with the child living in the home and driving the family cars). As long as the child drives the parent’s owned and scheduled and insured vehicles there is no worries. However, when they take a friend’s car or rent a car, they can no longer rely on their parent’s policy to be there for them.

What is the answer? It is best for the child, who is now out on their own, to get an auto policy for their car in their own name. This makes them a “first named insured” and gives them the valuable “drive other car” coverage that they used to have when living with their parents.

If they don’t own a car, and are now living in the big city, they should speak with their insurance agent about a personal “named non-owned” auto policy. Some insurers may also include this as an add-on to a renter’s policy. Most importantly, make sure to count “leaving the nest” as one of those life changing events that requires a coverage discussion with your trusted insurance adviser!