Multiple generation homeowners insurance

A 2008 report by the Pew Research Center found that 16 percent of the total U.S. population - roughly 49 million people - live in a house with two adult generations or more. With so many households operating in a similar manner, many live with siblings, parents and grandparents, or some combination of multiple younger or older generations.

Each additional person under your roof adds an inherent risk simply by residing there, which can cause your home insurance rates to fluctuate because more coverage will be necessary.

Especially during difficult financial times, some young adults move back in with their parents, whether by choice or necessity. The same goes for adults having to take care of aging parents who can no longer live on their own due to medical or monetary reasons.

The National Association of Realtors found that 33 percent of multi-generation households are a result of cost savings. Another 20 percent were formed to spend more time with family, while 17 percent were because of health reasons.

The extra people mean extra insurance. Here are a few things to keep in mind:

Homeowners
Your insurance company should be notified if additional family members move back in with you. To make room, you may build an extra living area onto your house, or perhaps knock down a wall to open up the space a bit. Both of these instances would likely affect your homeowners insurance. Also, your home will become more crowded, which means there is a higher chance of fire and related damages.

Auto
If more people are going to be borrowing your car, then they should be added to your car insurance policy. In this case, another person's personal history and driving record will affect your monthly rates. You could look into family plans that bundle together multiple people under a general policy so that the cost is lower. Also, younger adults who will be using your vehicle are often accompanied with higher rates because of the perceived risk.

Property
New or returning residents of your home are going to be bringing their belongings with them. It may be only a bed, clothes and few personal items, though you may have to rearrange the entire layout of your house if there will be more furniture. In either case, more property means more risk. You may need to purchase additional coverage such as umbrella insurance to make up for the new pieces of property.

"We've had several losses where another generation has moved back into the home, and they found that there are a lot more contents in the home than what the average policy supports," said Rick Abers of Chubb Group of Insurance Companies, according to U.S. News. "It's more jam-packed with items, and there is basically a cap on contents coverage when you have an insurance policy."

CoverHound can provide real-time home and auto insurance quotes for your convenience.

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