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Does Your Auto Insurance Cover Your Grandkids?

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Having your grandkids for a weekend or the summer can be fun, but could lead you into a cornered situation. If your grandchildren are visiting and want to get out and about, your car may be their first target. However, before you hand your grandchildren the keys to your car, ask yourself, "Does your auto insurance cover your grandkids?" 

Who Should Be Covered?

According to the United States Census, grandkids are doing more than just visiting their grandparents. In 2011, 7.7 million children lived with a grandparent, and almost 3 million children have grandparents as their primary caregiver. In most cases, single parents turn to grandparents to help them with child rearing. If you have one of these types of kinship with your grandchildren, having auto insurance that covers them is essential.

Does Auto Insurance Cover Your Grandkids?

In most cases, your auto insurance will cover your grandkids when they borrow your car. Insurance follows your car under the permissive use terms. Permissive use simply means that you have given someone permission to drive your car. Thus, your auto insurance should cover them if something goes wrong.

Before you grant your permission, make sure the person has a valid driver's license. This goes for everyone who drives your car and not just your grandchildren. If your son-in-law has an expired license and drives your car, your insurance company will not cover it regardless of your permission. 

If you are the primary caregiver or live with your grandchildren, permissive use may not be enough. You may have to add the grandchildren to your auto insurance policy. Most people try to avoid this because teenage drivers can drastically increase auto insurance rates. With 580,000 grandparents who are caregivers being below the poverty level, this increase in auto insurance could have dire consequences on your finances.

However, most insurance companies require that all members of a household that drive are listed on any insurance policy. So if your grandkids like to drive, kindly ask them to drive to a part-time job after school to help pay for the increase in insurance rates. 

What Happens When Your Grandkids Drive Your Car?

If your grandchildren are not listed on your insurance, your policy automatically takes the role of primary coverage. That means if they get into an accident that is his or her fault, your insurance is liable. However, if your grandkids have their own insurance, their insurance works as a secondary coverage. It is supposed to cover their medical expenses or any expenses that goes beyond your primary coverage insurance. 

If there is an accident under permissive use, you will also have to file a claim with your insurance. You will have to pay that deductible for them to pay out.

These are general auto insurance rules. These policies may vary depending on your company and your state. Get in touch with an insurance agent, like those at Randy Yates Insurance Agency, to see if your auto insurance covers your grandkids.