Is Your Partner Covered?

With societal changes regarding who is and who isn’t considered married, it might be wise for those who are caught in this discussion to research how your car or home insurance defines your relationship. 

It may or may not be too important but the conditions of a marital status brings certain benefits to the insurance contract.

 For instance, on a car policy the definition of an insured means you or the entity named in the Declarations. It also includes the following as insureds: if you are a person, residents of your household, your spouse, your relatives, and minors in the care of you or your relatives. Insured does not include a relative age 25 or over who is a student and lives away from your household premises while attending school. Who is considered a relative so coverage would be in effect? A relative means a person related to you by blood, marriage, or adoption, who is a resident of your household, including a ward or foster child. This definition applies only if you are a person.

 Under this definition if you and your partner meet the state’s definition of being a married couple then all the benefits bestowed upon the named insured would extend to both of you. However, if you have just a “ live in” relationship, your partner has no covered interest in your car insurance policy. He or she has no right to borrow your car unknowingly to you or any right to give permission to another person to drive it–also misses out on coverage afforded under uninsured motorist/ underinsured motorist for medical expenses incurred in a vehicle accident, as a pedestrian, an equestrian or a bicyclist. There may be some outside chance he or she may be able to tap into your liability coverage but then only if you could be held responsible for injuries they may sustain–highly unlikely if injury is from being a pedestrian, equestrian, or bicyclist. There are some complications with medical coverage as well.

Medical coverage pays reasonable and necessary medical and funeral expenses resulting from bodily injury caused by an occurrence for any person occupying an insured vehicle with the permission of the insured or the permission of an adult relative. It also pays reasonable and necessary medical and funeral expenses for you or your relatives who sustain bodily injury caused by an occurrence while occupying an insured vehicle not owned by any insured. Therein lies the complication, medical is extended when your partner is in your insured vehicle; but not meeting the definition of relative means if occupying a non owned vehicle medical coverage does not extend.

 Switching to homeowner insurance, the same definition of insured applies. It is important to focus in on the details of insured including “if residents of your household, your spouse, your relatives, and minors in the care of you or your relatives.” This definition is not broad enough to include guests or a permanent partner even though they may be residents of the household. There are some coverages you as the insured can ask to be extended to guests, but there is no provision for covering a partner, i.e. you have a fire and your guests lose their personal belongings in the fire. You can allocate from your policy limits sufficient to cover their loss, but it does reduce the amount you can recover on your own loss. No problem if you have more than enough coverage at the outset. My opinion is that there would be a time limit allowed by the adjuster in determining extension of coverage to guest. It would also create some difficulties if as partners you purchase household goods together by sharing the cost. How will adjuster pay for loss if you are not the sole owner of those items? 

Another issue arises with a divorce or partnership dissolving. As soon as separation occurs and one or the other moves out of the home, no coverage is made available to the departing insured. He or she must purchase a policy of his/her own if coverage at the new location is desired. This is true for divorce where partnership dissolution has no impact since there was no contractual provisions anyway.

 A simple way to alleviate many of the concerns mentioned above can be attended to by simply having both parties’ names added to declaration pages upon issuance of the policy. This allows both parties to be named insureds on the declaration page thus bypassing requirements spelled out in the policy language defining who is an insured. Both have equal rights to policy provisions and benefits so either can exercise them as they need to. Normally, the first named insured would keep the existing policy, with the only requirement being the removal of the name of the person moving out. The second named insured would be able to show to the new company continuous coverage so no penalties for having gone without evidence of insurance. If departing person chose to stay with existing company, a new policy would be issued showing the named insured and the new location along with vehicles owned.

No one sets out to end a marital relationship but a little caution to begin with may save some difficulties later on.

 When getting a quote, if you are in a tenuous relationship, it would be wise to let the agent know that so he or she can advise you properly.

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