Three's Company, Too!

When the tv show "Three's Company" aired in 1977, no one but an insurance nerd like me worried about the insurance implications of unrelated people living together.  "I wonder if Jack, Janet and Chrissy each had their own renters policy to cover their belongings?"  

Today, about 1/3 of married people in the US have cohabitated.  A recent study reveals that people who cohabit with just one person and then marry that person go on to accumulate wealth at double the rate of people who marry without cohabiting.  No wonder cohabitation is on the rise!

Seriously, there are many types of living arrangements these days:

• Cohabitation couples (AKA significant other)
• Boomerang "kids" moving home with parents
• Aging parents moving in with adult children
• Grandkids being raised by grandparents

Does your insurance agent know about these living arrangements?  There are significant coverage implications that need to be addressed, before an uninsured claim arises.  

Let's talk about your home insurance which covers your property and provides liability insurance in case someone sues you.  Everyone that lives in your household is covered, right?  WRONG.

Most homeowner policies cover "you" (person named in the policy), your resident spouse, any resident relatives and any persons under the age of 21 that are in your care.

So, on a basic home policy, your live-in (no matter the gender) is not covered.  Likewise, if your spouse moves out, he/she is not covered.  

The other scenarios listed above will have coverage under the homeowners policy as long as the individual's legal address is the same as yours and they are a relative.  (Note - relative is NOT defined in the home policy.)

Bottom line, talk to your TrustedAdvisor about the individuals living at your home and what type of coverage they have and what they may need.  Affordable solutions are available.

Next time, we'll talk about your auto policy and how living arrangements and policy language determine who has what type of coverage.