Tom's BlogAccording to US census data collected over the 50 years between 1950 and 2000, the number of unmarried couples living together has increased from 20% to 50% of households. Based on this trend, that number is expected to increase even higher when the 2010 census data is released. If you are in a living together and unmarried relationship, there are some potentially costly gaps in both your homeowners insurance and auto insurance policies. In this article, we’ll focus on home insurance and in our next blog post, we’ll cover the gaps in your auto insurance policy.
Gaps in Personal Liability Insurance
Most homeowners insurance policies in North Carolina provide liability insurance protection for the named insured, his or her resident spouse and resident relatives. The “named insured” is the person or persons whose name appears on the declaration page of the policy. Coverage is extended to the named insured’s spouse living in the household. Coverage is also extended to residents who are relatives by blood, marriage or adoption.
So, what does this mean? Anyone who is not a named insured or related by marriage, blood or adoption has no liability protection from the named insured’s homeowners insurance policy.
Consider this scenario…
A girlfriend and her son move into her boyfriend’s home who has a standard North Carolina HO-3 homeowners insurance policy. One day, her son is with his friends at a park riding their skateboards when he accidentally slams into one of his friends knocking him down. His friend hits his face on the concrete curb causing serious facial damage. The girlfriend’s son was clearly at fault and his friend’s parents sue her for the plastic surgery medical bills.
Who is going to ultimately pay for the lawsuit? You guessed it. Unless the girlfriend has a separate renter’s insurance policy or is a named insured on the boyfriend’s home insurance policy (most insurance companies will not allow this unless they are married), she will pay out of pocket for the lawsuit.
Gaps in Property Coverage
Not only is there a lack of coverage for liability protection for unmarried couples living together, there is also no coverage for personal property. Again, most homeowners insurance policies in North Carolina only cover property owned (or in the care of with special limits) by a named insured, spouse or resident relative. In the case of the boyfriend and girlfriend living together in his home, there will be no coverage for her personal property from his home insurance policy.
This means her clothes, furniture, electronics and the rest of her belongings would not be covered. Most homeowners insurance policies also exclude personal property of roomers, boarders or tenants.
So, if you are in an unmarried relationship living together, what do you do?
Call our office right away. The first thing we will do is see if the homeowners insurance company will allow us to add your girlfriend or boyfriend as a named insured. This is highly unlikely but worth checking out. If we can’t do this, we can provide a renters policy that will include coverage for liability and personal property. Renter’s policies are very inexpensive starting at $10 a month and increasing based on the amount of personal property and liability coverage needed along with other underwriting factors.
Unless you enjoy studying insurance policies, there are probably other gaps you don’t know about that may affect how you are protected. The best way to fill these gaps is to get a 21 point protection review from one of our protection team members. This usually takes about 15 minutes or you can download a copy of our protection review by clicking here. Of course, feel free to give us a call at 866-869-3335 whenever you have an insurance question.
