What changes on your insurance when a parent or adult child moves in? A relative who lives with you generally becomes part of your homeowners and Michigan auto PIP coverage. That can protect them, but it can also change your PIP options, your contents limit, who drives your cars and whether a hired caregiver needs workers' compensation. Tell your agent when they move in.
The short version: Tell your agent who's moving in, whether they have their own car and auto policy, and what health coverage they have. Raise your contents limit for their belongings and schedule valuables. If they'll drive your cars, list them. If you hire a caregiver, ask about workers' compensation.
Your homeowners policy
Under ISO's 2011 homeowners form (HO 00 03 05 11, an edition many carriers still build from), "insured" includes residents of your household who are your relatives. Carriers' forms vary, but most follow the same idea. That means:
- Their belongings are covered under your contents coverage, so make sure your limit is high enough for both households' property. Jewelry, art and collectibles may need to be scheduled. See scheduling jewelry and valuables.
- Your liability doesn't cover their injuries. Homeowners liability excludes injury to an "insured," and medical payments coverage doesn't apply to people who regularly live in the home. If a parent falls on your stairs, your homeowners policy generally won't pay a claim from them. Their own health coverage is the first line, which is one more reason to keep it strong.
- Their liability may be covered as a resident relative, which is a good reason to make sure your liability limits and umbrella are high enough.
Michigan auto: PIP, cars and drivers
- PIP follows them. Michigan PIP covers relatives domiciled in your household, meaning it's truly their home, not a temporary stay (MCL 500.3114). If they have their own auto policy, their own company pays first.
- Their car needs its own coverage. If they own a car that's driven, it must be insured, and an owner whose uninsured car is involved in a crash can't collect PIP. A car that's parked for good can often be stored instead.
- Your PIP choice applies to them. If you've opted out of PIP medical, everyone in the household must have qualifying health coverage or their own PIP. With $250,000 with exclusions, only people with qualifying coverage can be excluded. A parent with Medicare Parts A and B, or Medicare Advantage, qualifies. An adult child who is uninsured, on Medicaid only, on VA coverage only, or on a health plan with a deductible above $6,579 does not. If someone in the household doesn't qualify, your PIP choice may need to change.
- Drivers. If a parent or adult child will drive your cars, tell your agent so they're listed. If they shouldn't drive, ask about excluding them, and understand Michigan's required warning: "when a named excluded person operates a vehicle all liability coverage is void—no one is insured." Owners stay fully personally liable, and the excluded driver gets no PIP.
Hiring a caregiver
If you hire someone to care for a parent in your home, Michigan's workers' compensation law can apply to you as an employer. Household workers are covered when they work 35 or more hours a week for 13 weeks or longer in the prior 52 weeks (MCL 418.118). Family members who live in the home aren't counted as employees. ISO's 2011 homeowners form excludes injuries to anyone eligible for workers' comp you're required to provide, even if you never bought it, so if you hire directly, ask us about coverage. If you hire through an agency, confirm in writing that the agency is the employer and carries workers' compensation and liability insurance.
When a parent moves to assisted living instead
A parent who moves to an assisted living facility generally isn't a resident of your household anymore. Some carriers offer an endorsement that covers a relative's belongings, and sometimes liability, in an assisted living facility. Availability varies, so ask before the move.
Frequently Asked Questions
Is my elderly parent covered by my homeowners insurance if they live with me?
Generally yes, as a resident relative under many policies, including ISO's 2011 homeowners form. Their belongings fall under your contents coverage, but your liability coverage generally won't pay for their own injuries at your home.
Does my auto insurance cover a relative who lives with me in Michigan?
Michigan PIP covers relatives domiciled in your household. If they have their own auto policy, their own company pays first. If they'll drive your cars, they should be listed, and if they own a car, it must be insured.
Can I keep my PIP opt-out if my adult child moves in?
Only if they have qualifying health coverage or their own Michigan auto policy. An adult child who is uninsured, on Medicaid only, on VA coverage only, or on a plan with a deductible above $6,579 doesn't qualify, so your PIP choice may need to change.
Do I need workers' comp for a caregiver in Michigan?
Possibly. Michigan's workers' compensation law covers household workers who work 35 or more hours a week for 13 weeks or longer in the prior 52 weeks. Family members living in the home aren't counted. Ask your agent before hiring directly.
Should my adult child get their own renters or auto insurance?
If they own a car, it must be insured, usually on its own policy. While they live with you, their belongings are generally covered under your homeowners policy, but valuable items and a separate apartment later will need their own coverage.
The bottom line
Taking in a parent or an adult child is a family decision first. A quick review afterward makes sure your policies still fit everyone under your roof.
J. Jacobs & Associates is an independent agency in Lake Orion that has helped Michigan families since 1981. We represent more than twenty carriers, so we can update your home and auto coverage, set up a policy for a parent's or child's car and compare companies at the same time. Call (248) 693-6455 or start a quote.