By Lorie Ham
We all know that as we age a lot of things change, but have you ever thought about how your insurance needs might change as well? According to AAA, when you reach the later years of your life you should consider giving your insurance agent a call. If you retire, you may qualify for a discount on your homeowner’s or renter’s insurance, and if you drive less than before you may be able to have your auto insurance premium reduced. Sometimes your auto insurance rates increase as you get older, but you may be eligible for a discount if you complete a DMV-approved course for mature drivers.
Dalia Jimenez with Mennonite Insurance states that the number of miles people drive can decrease when people retire and no longer commute. “That lowered exposure can result in lower premiums on their auto policy.” Also, if you reach a point where you can’t drive safely, you may choose to sell your vehicle or give it away and no longer need auto insurance.
Your home insurance needs may change as well. As people age and kids move away, the need for a large house goes down. Perhaps you will even decide to sell your house and rent instead. “That means the large homeowner policy can now become a smaller renter’s policy, just covering contents,” shares Jerry Linscheid, Chief Executive Officer of Mennonite Insurance. “At the same time, the client has spent their entire working life building assets and they actually have more to lose in a lawsuit than they did when they were younger. So, getting a larger liability policy (umbrella) makes sense. The larger liability policy protects all your assets that might be at risk if you were ever named in a lawsuit.”
But you are not the only one who is growing older. Your children are as well. When your children begin the transition from being your dependents to being independent adults, insurance issues can arise. When your children start to become independent, especially when they no longer come home every day, you should ask your insurance agent if there is a need for additional coverage and a way to provide that coverage.
“Both auto and home insurance policies place an importance on who is a ‘resident’ of the household,” continues Jerry. Residents are generally covered by your policy, while non-residents are generally not. “Residence is often not defined in the policy, because there are many factors that can affect the determination. Essentially, residence is a subjective intention to live at or return to a certain place as shown by objective actions.”
Factors that courts look at to determine residency are:
- How often does the person stay at or return to the residence? Are those regular times, such as college breaks and during the summer?
- Does the person have their belongings and a permanent room at the residence?
- Is the residence listed on important documents, like driver’s license? Voter registration? College enrollment?
- Does the person receive mail at the residence?
When a child has taken enough steps to no longer be a resident of your household, coverage under your insurance policies may be diminished or go away completely.
Here are a couple of examples of how coverage can be impacted:
Your son or daughter moves out and is no longer a resident of your household, but they keep and drive your car listed on your auto policy. While they are driving your car (with your permission) they are covered as an insured for liability under your policy. However, when they drive someone else’s car, they are no longer covered on your policy.
If your child is still considered a resident of your household but lives away from home (for college, etc.) their contents coverage is limited to 10% of your contents coverage on your homeowner’s insurance. If they are no longer a resident of your household, there is no coverage for property or liability under your homeowner’s insurance.
Bottom line, as you age not only does your body change, but your insurance should change as well to meet your changing needs. Mennonite Insurance is happy to chat with you and find out just what your current needs are. You can contact us at 559-638-2327 and find us online at mennoniteinsurance.com and our Facebook page.