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Ask the Home Insurance Expert

My 28-year-old son was laid off and is now living at home with us again. He's brought all his stuff, which we're storing in the basement. While he's with us, he'll be helping out with household expenses as much as he can. Does he need renters insurance?

A growing number of adult children have had to return home to survive the recession. The so-called boomerang effect does have insurance consequences, but your son doesn't need renters insurance, even if he pays you rent. The only exception is if he's living in a separate rental unit, such as an apartment above your garage.

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Your son's belongings are protected under your home insurance policy while he's living with you. However, whether your home insurance policy limits are high enough to cover all your possessions, plus his stuff, is another question.

Home insurance coverage for personal belongings is usually a percentage of the coverage amount for the dwelling. Revisit the policy to see precisely what that amount is to determine whether it's enough. It might not be if your son has expensive computer and stereo equipment, flat-screen TVs and a load of pricey sports gear.

In addition, policies have specific coverage limits on certain items, such as jewelry, cash or firearms. If he's a gun fancier, then you probably need to get additional insurance to cover his collection.

Talk to your insurance agent about the new living situation to see if you need to increase your home insurance coverage limits. This would also be a good time for you to update the inventory of all your belongings as you get a handle on the value of your son's stuff.

The Insurance Information Institute's KnowYourStuff.org website offers free home inventory software and provides helpful information on how to best catalogue our belongings. Maintaining a complete and updated inventory of your personal property makes the claims process much easier if you experience a loss.

Meanwhile, if your cars are insured with the same company, you could bring all the policies under one household, which might decrease car insurance rates through a multi-car discount. Regardless, your son should contact his car insurance company to update his address. Car insurance rates are based partly on where vehicles are garaged.

Last updated: Feb. 26, 2011
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