News Release

New Jersey Department of
Banking and Insurance

Commissioner Tom Considine

For Immediate Release:
February 18, 2010

For Further Information:
Ed Rogan or Marshall McKnight (609) 292-5064

In today’s difficult economy, many new college graduates are moving back in with their parents. When an adult child is forced to make that move because of a layoff, a lack of job opportunities, a divorce or any other reason, the family should review their health, homeowner’s and auto insurance policies immediately to make sure everyone has the proper coverage, New Jersey Department of Banking and Insurance Acting Commissioner Tom Considine said today.

“A grown child moving back home can change a family’s insurance situation and inadvertently leave someone uncovered or under covered,” said Considine. “When this occurs, when a so-called boomerang child comes back home, families should take a close look at their insurance.”

A Pew Research Center study in November 2009 found that in the past year, nearly 13 percent of parents with grown children have had at least one of their adult sons or daughters return home to live for financial reasons. Saddled with college loans and unexpected job loss, these young adults are forced to live at home until they can find a job and get their finances back on track. 

Commissioner Considine recommends that families who find themselves in this situation consider the following:

Review Your Insurance Policies

Families might find they can save money by combining existing insurance policies. For example, young adults renting before moving back home no longer need renter's insurance; instead, they could potentially be added to the homeowner’s policy. However, they need to be sure that their parents’ homeowner’s policy has a broad enough scope to include them as “insured.” Additionally, young adults might need additional coverage if the move back home forced them to rent a storage locker for their belongings or if they have big-ticket items, like jewelry, expensive electronic equipment or other valuables that may require coverage beyond what their parents’ homeowners’ policy currently provides.

Auto Insurance

Auto insurance coverage is another important consideration. Does the young adult have his or her own car that needs to be added to the parent’s policy? Or does the young adult need to be added as another driver of an existing family vehicle? The good news is parents can keep any member of the family on their auto insurance policy as long as that person lives in the same house. But rates may increase, so parents should look for discounts such as those given for multiple vehicles, multiple policies (homeowner’s, life, health, and disability), anti-theft devices and good driving records.

Parents should discuss the situation with their insurance agent or carrier to determine what level of coverage their family needs. To learn more, young adults can visit the National Association of Insurance Commissioners' section for young singles on Insure U: www.insureuonline.org/course_singles.htm

Health Insurance

In New Jersey the law allows young adults to continue coverage or become covered under a parent’s group health plan as an overage dependent until the young adult’s 31st birthday. There are a number of conditions -- the most important are:  the coverage must be insured (not self-funded) and the underage child must have no dependents of his or her own (be unmarried and childless). Individuals who reside in New Jersey are guaranteed the right to purchase health coverage under standard individual health benefits plans designed by the Individual Health Coverage Program Board as well as under the more limited "Basic and Essential" plans without regard to health status.  Some of these plans are rated based on age with lower premiums being charged for younger persons.  And the Basic and Essential plans have more limited benefits and lower premiums, which may be appropriate for a young healthy person.  For more information on individual health coverage in New Jersey, consumers can go to:  www.state.nj.us/dobi/division_insurance/ihcseh/shop_ihc.htm

For more information about auto, home, life and health insurance options, as well as tips for choosing the coverage that is right for you, visit www.InsureUonline.org, www.njdobi.org or call 1-800-446-SHOP (7467).