Coverage Tip

Your 21-year old daughter finally saved enough money to move out of your house and into her own apartment. When she moves, she takes “her” car with her. It is not really “her “car, as it is titled to you, so the car remains on your personal auto policy on which both you and your spouse are the Named Insureds.

The Problem is that several months later, while jogging, the daughter is hit by an uninsured car and seriously injured, so you turn in a claim for your daughter’s injuries to your auto insurance company.
No problem, right? After all, your personal auto policy still has the daughter listed as a driver and the vehicle is still insured on the policy.

Wrong! There is a BIG problem, as neither Part B – Medical Payments nor Part C- Uninsured Motorists will provide coverage for your daughter’s injuries.

Former “Family Members” – Coverage and Lack of Coverage
Children who no longer reside with their parent (or parents) are only an “insured” under the parent’s auto policy when driving or occupying the parent’s “your covered auto”. These former “family members” now fall within the commonly used term of permissive user and are only covered under their parent’s policy for:
1. Liability while driving the parent’s “your covered auto”
2. Medical Payments while occupying the parent’s “your covered auto”
3. Uninsured/Underinsured Motorists while occupying the parent’s “your covered auto”

Former “family members” no longer have the following coverages:
1. Liability while in an auto other than the parent’s “your covered auto”
2. Medical Payments while in any auto other than the parent’s “your covered auto”
3. Medical Payments while a pedestrian
4. Uninsured Motorists while in any auto other than the parent’s “your covered auto”
5. Uninsured Motorists while a pedestrian

No doubt you will agree – these are important coverages to be without!

The Solution is to write a personal auto policy with the child as a Named Insured and attach the Named Non-Owner Coverage endorsement (ISO: PP 03 22). This endorsement is used in the ISO Personal Auto program to provide insurance coverage for the person who does not own a vehicle, but still wants insurance protection.

It can be used to provide Liability, Medical Payments and Uninsured/Underinsured Motorist coverage for the individual(s) named in the Schedule. These coverages must be individually selected with a Limit of Liability and a Premium shown on the schedule.


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