Kids Returning from College and the MA Personal Auto Policy

I was in Chicago last week attending my daughter’s Commencement celebration for her Masters in Nursing. After six years split working in Washington DC and Chicago my daughter will be coming back to MA shortly with her new husband.  As they start their job search they will be moving back home with my wife and I to save money. That means I need to take a look at my auto policy to make sure they and I are properly covered. The same is true for any parent with a child returning from college whether it be just for the summer or for the foreseeable future.

The MA auto policy has very strong language regarding the listing of household members and the information provided on those members.  Specifically, the policy states that the insurance company “may refuse to pay claims under any or all of the Optional Insurance Parts”.  The company may also “limit payments required under Part 3 and Part 4”.   

Assume John Doe graduates from college and has moved back home and he does not have his own policy.  His parents have not changed their policy to show that John is driving their car.  A few months later John is driving the family car with a friend in the car.  John takes a curve too fast and goes off the road hitting a wall injuring his friend and totaling the car.   Because John is either not listed as a driver or is excluded as an operator the insurance company will now conduct an in depth investigation to determine whether John’s parents were attempting to conceal John’s use of the vehicle to keep their premiums lower or in other words to commit “insurance fraud”.  If they come to that conclusion they can deny coverage under the optional coverages including Bodily Injury to Others and Collision.  This could leave the parents on the hook for the loss.

Many parents exclude children who go off to college as drivers on their policies.  In this way, the child is still listed on the policy but the parent acknowledges that the child will not be driving the family car while he or she is away at school and is charged accordingly.  This is usually only done when the school in question is far enough away to make visits home unlikely.   Upon graduation or summer recess the child now returns home and he or she must be “un-excluded” if the child will be allowed to drive the family car.  Or, in my case where my daughter has truly been outside of the home for the past six years, I must add her and her husband as drivers on my policy.

If the child has a car of his or her own then he can be deferred on the parents’ policy.  Being deferred means that you are acknowledging that the child will be using your car but that they are being charged on a different MA policy.  In these cases the parents should also be listed on the child’s policy as deferred operators.  That is what we will do when my daughter returns home.  She and her husband will be listed on our policy as a deferred operator and my wife and I will be listed on their policy as deferred operators.

The simple rule to follow is to list all household members and exclude or defer as appropriate and to keep your insurance agent or company up to date with any changes.