What are the insurance implications of having a boomerang kid at home?

Theo Thimou | March 22nd, 2017

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Demographers tell us that boomerang kids—adult children who move back home after getting out of school or because they can’t find work—are at the highest numbers in U.S. historys. More than one third of young adults are now living back at home with parents. That’s 22 million boomerang kids.

While it may not be foremost on your mind when a child moves back home, there are insurance implications to be considered.

Boomerang kids are the new normal

We’re at a historic crossroads in American history. People between the ages of 18 and 34 years old are now more likely to live with their parents than in any other household configuration since the 1880s! That’s according to the Pew Research Center.

The boomerang trend is stretching Baby Boomers and Generation X parents thin. What’s been called ’empty nest reversal’ isn’t cheap. The Wall Street Journal figures having an adult child at home can cost between $8,000 and $18,000 per year—and that’s based on numbers from three years ago.

‘Decisions to marry later and the tight job market have forced many middle-aged adults to share their homes with family members across generations,’ said John M. Huff, president of the National Association of Insurance Commissioners. ‘When there is an increased headcount under your roof, there are likely new insurance implications.’

The NAIC recommends you set clear expectations with your boomerang kid:

Know who is paying for health insurance.
Will auto policies be combined? If so, will your adult child’s driving record hurt your premiums?
If your boomerang kid is coming with fancy electronics or sporting equipment, will you need an additional rider on your home insurance policy?

To help start the discussion, the NAIC has a Welcome Home contract that can be helpful. It covers issues of logistics, finances, mutual respect and more.