Adult Children on parent's Auto Insurance may not be Good

For Lots of reasons

Besides the legal liability that may extend to the parents from an adult child's negligence in an automobile, there are concerns also about the Michigan No Fault coverage for that child who is involved in a car accident.

The Michigan Court of Appeals last week re-affirmed a long standing application of the law.  It stems from parents who add children to their auto insurance policies, when those children no longer live with the parents.  Because they no longer live with the parents, they may not be treated as part of the household, and may lose No Fault "household" coverage for that reason.  More importantly, though, is that the children added to the policy are not the Primary Insured on the account, instead they are additional drivers added to the account.

The court held that as additional drivers added to the account, they were not "insured" for the purposes of being able to receive No-Fault benefits under Michigan Law. So, if those children also didn't get coverage for no longer being a member of the parents household, they may be completely out of luck under the Michigan No-Fault coverage.