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Separate car insurance policy for adult child?
Old 09-22-2021, 07:48 AM   #1
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Separate car insurance policy for adult child?

My daughter is 18 and commutes to a community college 3-4 times a week. So, we need another vehicle.

I was thinking because of liability for me, and that she is an adult, to title the car in her name (she'd be driving it mostly) and get her own insurance policy.

What got me thinking was those Good2Go commercials. ( I wouldn't get her one of those policies, I hear they have a pretty bad rep.

Should she get into a liability issue, would I be off the hook?

Any downsides to this?
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Old 09-22-2021, 07:54 AM   #2
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Disclaimer: I'm not an insurance person.
It probably does add an insulating distance from you if she has her own policy. Although it comes down to the limits of the liability on the insurance, and anything over that in a lawsuit would be on her; not withstanding that ambulance chaser lawyers can sue anyone for anything. However I think a bigger issue may be that your daughter with essentially no real assets, can get by with much lower liability limits on her own policy that may save money. On your policy she may need to carry the same limits as you have; which would be overinsured for her personal needs. With subsequent increased costs for coverage over what is really needed.
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Old 09-22-2021, 07:56 AM   #3
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Her own auto policy will probably be very expensive as compared to putting her on your policy. Just buy an umbrella policy with ample liability coverage, which you probably should have anyway.
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Old 09-22-2021, 08:00 AM   #4
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Just moved our oldest to his own policy. Grange was pretty reasonable at a little less than 10% more. I sleep better with this setup. It also helps teach life skills if you let them pay the premium.
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Old 09-22-2021, 08:55 AM   #5
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As long as your daughter is part of your household, you insurance company will insist that she be a named driver on your insurance policy. What savings you would have by putting her on a separate policy is questionable. May be slightly more insulated from law suits but a good lawyer will go after whoever has the money.
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Old 09-22-2021, 10:24 AM   #6
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We recently gifted our 18yo her car and had her get a separate policy. On our insurance, she was costing us $1100/yr. On her own, it is $1300/yr AND our umbrella dropped from $1200/yr to $780/yr.

Liability? Who knows what some greasy attorney could dream up. However, I see it as an extra layer between her and our assets.
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Old 09-22-2021, 10:52 AM   #7
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My daughter has been an insurance nightmare. She's let two of her boyfriends drive my cars against my will, and both totaled out late model Honda's. Neither guy even had a driver's license.

Then she had another boyfriend who we later found out was a very well known burglar. After she broke up with him, he burglarized our house--and got into my safe. He also got all our silver flatware and much of my wife's jewelry. Insurance companies are not kind on theft payouts.

My auto and homeowners' insurance is our biggest expense in our retirement. And have 2 or more claims in 3 years and you can hardly get insured--even at double normal premiums.

Sign the car over to the kids and make'em work enough to pay their own insurance. They can be too much risk to your pocketbook.

Note: My daughter's now not had a car in 2+ years, and she's on "ankle express." And we moved 65 miles 2 years ago to get away.
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Old 09-22-2021, 11:22 AM   #8
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OP have you been with your present insurance company the whole time? If so have you called your agent? We have all our insurance bundled with one agent. If your DD has a good record you probably would to stay with your current if you buy her own policy it should give her a better rate.



In something like I don't know why you are asking strangers on the internet.
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Old 09-22-2021, 11:39 AM   #9
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I'd consult your attorney and insurer. What worked best in my state for my situation will likely differ for you. That said, for our college driver we titled car solely in her name, she had car insurance in her name only with premiums paid from account in her name only, her apartment lease was in her name only paid from her own bank account, and she carried a modest liability rider on her renters ins. policy. My understanding was that these steps likely reduced my exposure.

I was the person funding nearly everything she did for 5 years (she was a FT college student with a low paying internship), and I claimed her as a dependent on my taxes. I was told that = some exposure. Ymmv, see your attorney and ins. agent.
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Old 09-22-2021, 12:17 PM   #10
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Originally Posted by freedomatlast View Post
Her own auto policy will probably be very expensive as compared to putting her on your policy. Just buy an umbrella policy with ample liability coverage, which you probably should have anyway.
Now that sounds like good advice. Wish I had thought of it while the kids were still in our household.
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Old 09-22-2021, 12:22 PM   #11
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For 3-4 days a week, maybe Uber/Lyft would be a cheaper solution... no car, no insurance, no gas, no maintenance, etc.

Otherwise, I think what RE2 said is correct, at least for every insurer we've ever dealt with. We've been told multiple times that any vehicle registered at our address (regardless of how it's titled), and any licensed driver living at our address (per their DL), must be included on our policy.

So both kids were on our policy throughout college. Although, neither had a car the first two years and we were allowed to temporarily remove them from the policy. Last 2 years, they both lived off-campus and had PT jobs, so they needed a car. We bought them each a car and provided insurance until they graduated and had jobs.

We probably could have kicked them off those last two years. They had off-campus addresses and we could have transferred the car titles to their names. But we were still paying all the bills at that point. And even though umbrella was pretty expensive during that time, the basic auto premium was a lot cheaper than if they each had to buy their own insurance.

But yeah, I was always worried about the liability if something really bad happened. Fortunately nothing did... and we had the umbrella just in case. Even if we had kicked them off the last two years, I don't think that would have shielded us from exposure. They were fully dependent on us except for meager earnings from internships and part-time jobs.
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Old 09-22-2021, 01:07 PM   #12
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Can't get separate policy while living at home in my experience.

But otherwise it is an excellent idea to have car and insurance in kid's name. AND for them to pay for these things, baby steps to the real world.
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Old 09-22-2021, 09:35 PM   #13
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I'm going thru this myself right now with a 16 year old who got his license last month. I have a vehicle and I'm letting him use a second vehicle I own. While he would never be allowed to drive mine, both State Farm and Geico told me that I could exclude him from the policy but not from an individual vehicle on that policy. It's all or nothing.

My next thought was to insure my vehicle thru one insurance company and exclude him as a driver, then insure my second vehicle thru another company and name him as a driver. Haven't run cost scenarios on that yet but last spring before he got his license I did have both vehicles insured thru separate companies and the cost wasn't much different when I combined them with one.

For reference, before he got his license I was paying roughly $100 a month combined on both vehicles with 100/300/100 liability plus comp and collision with a $2K deductible.
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Old 09-22-2021, 09:48 PM   #14
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Once our last kid was out of college and living on his own, we put the title in his name and he got his own insurance. What a relief.
We were providing nearly all his support and claimed him as a dependent while he was in college. We were told we'd probably be on the hook even if he was "away" to college. Insurance company told us that we should keep him on our insurance until he was actually independent of us. Fortunately, we made it through 3 kids without having any accidents worth making a claim for.
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Old 09-23-2021, 11:09 AM   #15
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Quote:
Originally Posted by Looking4Ward View Post
I have a vehicle and I'm letting him use a second vehicle I own. While he would never be allowed to drive mine, both State Farm and Geico told me that I could exclude him from the policy but not from an individual vehicle on that policy. It's all or nothing.
I am confused about this part. What does that mean that you cannot exclude your son from an individual vehicle on your policy even if he is excluded from your policy? Does that mean he (or anyone with a license at your residence currently not an insured driver on your policy) is not allowed to drive any of your vehicles that are currently covered by your policy?
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Old 09-23-2021, 12:01 PM   #16
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My DFIL lives with us and has for several years. His car is in his name and one his own insurance company that he has been with for years. My insurance company doesn’t require him to be on our auto coverage, but he is a named resident on our umbrella policy for homeowners liability concerns.
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Old 09-23-2021, 08:08 PM   #17
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I have sons and live in a major city. Insurance for their own policy would have been insane ��. At least 5k each. They stayed on my policy
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Old 09-23-2021, 09:26 PM   #18
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Originally Posted by PatrickA5 View Post
Once our last kid was out of college and living on his own, we put the title in his name and he got his own insurance.
We just did the exact same with our youngest daughter who just graduated university, moved out of State and started a new job. We signed over the car title to her, pointed her in the direction of an insurance agent in her new state, and called it good.
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Old 09-24-2021, 11:18 AM   #19
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Signed over one vehicle to the kid in Florida...even with USAA (and them an officer) they're paying more than twice what I was here.
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Old 09-24-2021, 11:35 AM   #20
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I am confused about this part. What does that mean that you cannot exclude your son from an individual vehicle on your policy even if he is excluded from your policy?
They would not let me exclude him from one vehicle on a policy insuring two vehicles - I would have to exclude him completely from both (the policy).

Quote:
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Does that mean he (or anyone with a license at your residence currently not an insured driver on your policy) is not allowed to drive any of your vehicles that are currently covered by your policy?
My understanding in Texas is that I can allow any "casual use" of my vehicle to someone else and my insurance will cover. But a licensed driver (and family member) living at the same address as me as indicated on their license (household) is not a "casual use" driver. So if I allowed that person to drive my vehicle and they are not listed on the policy as a driver, insurance would most likely not pay for any incident.

My intent was to have my son listed as a driver on the vehicle I am giving him to drive, thus incurring higher premiums, while excluding him on the policy as a driver on my other vehicle that he does not drive, hopefully not increasing the premiums on it. But two insurance companies wouldn't let me do that - they said I could exclude him from every vehicle on the policy but not specific vehicles.

I hope that makes sense. Another complication to consider in Texas is the Family Purpose Doctrine and how it applies to ownership of a vehicle and use within families.
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