Here’s a typical and all too familiar scenario. Months or years after your divorce, you hand the car keys to your minor child, who negligently wrecks the car and seriously injures another motorist. You promptly turn the claim into your insurer, thinking that your child is covered under your auto policy, only to be shocked that the insurance company denies the claim. And now both you and your child have been sued by the injured driver for thousands in medical bills and lost wages, and you are facing the prospect of personal liability – and possibly bankruptcy.
There are two principal reasons why the insurance company might deny the claim: your child is neither a “named insured” nor a “resident relative” under the policy. If your child is not a “named insured” listed in the policy, the policy will usually still provide coverage for “resident relatives” of the household.
But here’s the problem: with flexible parenting arrangements and written agreements that do not specify “residency” issues, where is your child actually residing? In one parent’s home? Or both? Or even at a third home if time is spent living with grandparents? The question is: is there anything you can do to ensure that your minor children will be covered in a future accident under one or both parents’ insurance policies?