Personal Injury Protection (PIP) is perhaps the most important coverage on your auto policy. If you or a resident relative are injured in an auto accident, PIP will pay the auto accident medical costs as long as they’re being incurred. PIP coverage for resident relatives is so important that, by law, your auto policy provides PIP coverage for your resident relatives automatically. Depending on the insurance company, and the age of your resident relatives, your insurance company might increase the PIP costs on your auto policy to account for the additional lives for which they’re providing PIP.
Many auto insurance discussions are driven by the charges visible on the auto policy’s declaration pages. Since the declaration pages don’t show each resident relative covered by the policy with a charge after their name, resident relatives are often not discussed until they are old enough to drive. In the absence of these conversations, people make a TON of assumptions about who is covered by their auto policy. A solid understanding of resident relative is critical in navigating situations such as: (1) divorce or separation, where the auto policy is owned by one parent and the kids live someplace else with the other parent; (2) when kids move away from home “temporarily” (however long temporarily is) and may still be driving a car titled to a parent; (3) parents who have resident relatives and still opt out of PIP. It’s better to find out your child isn’t protected by your auto policy’s PIP coverage BEFORE they’re injured in an auto accident so you can do something about it!
When too much focus is put on what insurance costs and not enough focus put into what it does, important topics like resident relatives can get skipped over. Given the “automatic” nature of how resident relatives are covered on your auto policy, this works out most of the time… until it doesn’t. If you have kids that you believe are covered by your auto policy, take the time to check your assumptions with your insurance agent. You owe it to your kids!