If your home is like a growing number of households these days, your “empty nest” is anything but empty. According to the latest data from the Pew Research Center, the number of us living in “multi-generational households” has more than doubled since 1980. That means families are adapting to a whole new model when it comes to day-to-day living.
As Baby Boomers are tasked more and more with supporting their aging parents, accommodating their college-aged children returning home and opening their doors to expanding extended families, they join the more than 50 million Americans living in multi-generational homes.
If you’re the head of one of these modern families, you’ll find you now have unique concerns when it comes to home, health, auto and life insurance.
The National Association of Insurance Commissioners (NAIC) has a list of useful tips to help you navigate through your latest questions when it comes to protecting your growing household.
When you have an adult child, a parent or other extended family member move into your household, you may well be in for some stressful times and critical financial issues.
Questions to consider:
- How long does a family member plan to live with you?
- Are you charging them rent during their stay?
- Did family members bring all their belongings with them?
- Will any of your new housemates be driving your vehicles?
When your household status changes, it’s time to review how your various policies will be impacted by the changes. It’ms probably time to contact your insurer or insurance agent to update them about your new circumstances and it might also be an ideal time to shop around for the best coverage you can get – for the best price.
Your Home Insurance
Once a new member of the household moves in, there is sure to be an impact to your homeowner’s policy coverage. That impact might include limitations – or even exclusions. Check with your insurer or review your policy to determine whether you might need extra coverage. In the event of a fire or theft, any member of the household’s belongings will typically be covered by a standard homeowners agreement. But keep in mind that those belongings might be subject to limitations. High-end items like electronic equipment or jewelry might require additional coverage.
Any pets moving in? Beyond coverage of possessions, consider if a pet might be joining your household. Say your new lodger’s dog gets out and bites the neighbor. Be sure your policy provides adequate liability coverage, and to make sure the situation is handled correctly. Your insurance company needs to know who is living in your home and whether any new pets have arrived on the scene.
Consider renter’s insurance. It’s typically rather inexpensive, and it also covers the renter’s property and liability up to the limits of the particular policy. Your dependents, like college students, are automatically covered under a parent or guardian’s policies. However, those dependents are generally only covered up to 10 percent of that parent’s policy. Check with your agent to find out the specific provisions of your policy.
Health and Disability Insurance
Insurers allow adult children, up to age 26, to be covered by their parents’ health insurance policies, but you need to shop around before adding adult children to your policy. While it may be less expensive for a healthy young adult to buy their coverage on the open market, if your adult child is older than 26, they’re essentially on their own.
Older relatives in your household, those over the age of 65, may qualify for Medicare. Details and information about Medicare coverage is available at the official U.S. government site for Medicare. It’s also a good idea to consider Long Term Care.
Another type of insurance to consider is disability insurance. If you were no longer able to work, could your growing family get by without your income? Protecting your income is an important aspect of becoming a multi-generational home. Check out our article on disability insurance basics to learn more.
Auto Insurance
Car insurers insist on knowing who lives in your household – and who drives your vehicles. Make sure to notify your auto insurance company if any new members of the household will be driving your cars. If a member of the household owns their own car, insurers are likely to want a copy of his or her auto policy for that vehicle.
If the household member is a licensed driver, even if they don’t own a vehicle, you’ll probably want to add them to your auto policy. Age and driving history will impact your rates, and if you fail to inform your auto insurance company of any drivers who will use your car, future claims could be denied. That failure could also mean your policy could be canceled (or not renewed) due to that lack of reporting.
If multiple drivers have policies with the same company? Consider bringing all of the policies together under one household policy to qualify for any multi-car discounts.
Life Insurance
Your family dependents probably rely on you to provide for them, so you should review your need for life insurance or your current coverage.
- How much of the family income do I provide?
- If I were to die, how would my survivors – both children and parents – get by?
- How will my family pay final expenses and repay debts after my death?
- Will there be estate taxes to pay after my death?
