car insurance

[Rose Pink]

Quite some time ago there was a discussion about car insurance and whether children should have their own policy vs being on the parents' policy. I haven't found that thread--1000 hits come up in the search--and I can't remember what was said.

My adult daughter is living at home and is buying her first car very soon. She looked into getting her own policy and it would cost more for her and her one car than for all three of us and three cars that I am paying now. Financially, it seems to make more sense to just add her new car to our existing policy and have her reimburse us. Please give me your thoughts and experiences.
TIA

Edited to add that we would have to put our name along with hers on her car title to get it insured under our policy.

 

[dougp26364]

I prefer for the kids to have, and be responsible, for their own coverage. At the time we were with a company that would write individual policy's for each driver and each car. Essentially it kept them off our coverage and kept our premium from increasing due to an underaged driver.

If the kids got tickets or were involved in an accident (and they did), it affected their rates and not ours. My record remained clean and intact while their premiums climbed as a result of their indiscreations with their cars. Eventually, they both learned something about responsibility and results caused by their actions.

Not all companies will allow this. Some are supposed to rate every driver in the household on every car. For us that would have been painful as my wife and I tend to drive newer cars and keep full coverage on them. It would really have hurt had our rates gone up because our son had 4 tickets and 2 accidents by the time he was 21 (he figured it out when his rates got so high he couldn't afford to go out. His record has been clean since that time).

We believed that, if the kids wanted a car, it was their responsiblity and they had to take care of everything that car needed. It's just the way we choose to do things. It's not the right way for everyone but we felt it's what our kids needed to learn about life. All families are different and face different situations. Just because this was the best way for us doesn't mean that it's the best way for anyone else.

 

[UWSurfer]

We faced this with our 18 y/o (now 20) who waited to get is DL and explored this. Putting him on a 1991 Chevy Corsica (178K miles) caused our insurance premium to go up $120/month. Had he got insurance independent of us it jumped to around $400/month.

Later that car had far more repairs needed than the car was worth and we junked it. Put him on a 1992 plain jane gutless Honda Civic (40K miles) and the premium jumped to $150/month.

All the cars title are under my wife's and my names. Now our twin 17 y/o's turn 18 next year and plan to get their DL's. Wife thought it appropriate we pay for the insurance because that's what they did when she was their age.

I'm now about to work to change her thinking. At these rates...I don't have and extra $500 - $600 a month laying around for this. :annoyed:

 

[Mel]

Many insurers insist on listing all drivers in the household, so it may be inevitable for your premiums to go up, unless you agree to not let her drive your car at all. If she is on your policy and has an accident, yes your premiums will go up, but you have to weigh that possible increase against the increased cost of her own policy. Also consider that once she is no longer in your household, you should be able to get your policy rated again without her, and your premiums should drop again (the claim should go against HER record, not yours).

Back when I was a teen our carrier advised that I would need to be listed on my parents policy if I was attending a school close to home. Because I was attending school out-of-state, I would only be an occasional driver, and did not have to be listed.

 

[tompalm]

My adult daughter is living at home and is buying her first car very soon.

If your daughter no longer qualifies as your dependent, I would recommend taking her off your policy for the purpose of liability. Also, consider how much coverage you have and if she really needs that amount. I called about my 23 year old son that lives at home going to college at UH. As long as I claim him as a dependent on my taxes, I am liable for damages in an accident. Our insurance agent, and attorney told us in a serious accident that they will find a way to come after you.

In 2009, our son will have graduated from college, no longer a dependent and he will probably still live at home. I plan to take him off our policy and reduce his coverage. The premiums will drop by $20 per month.

 

[Patri]

We keep the kids on our policy until they graduate from college and move on. The savings are tremendous. Definitely worth it. Of the four affected so far, none has crashed or anything serious. Even my husband or I could have accidents. Heck, I got a ticket for a turn violation and didn't realize that it affected the rate a little until the three years were almost up.

 

[LUVourMarriotts]

Here is one thread that I remember discussing auto insurance for children. Check out my last post for a tragic story that left a family to start all over financially because of a horrible driving decision made by their child.

http://tugbbs.com/forums/showthread.php?t=19272

If you add your children, also think about an umbrella policy. We just added an umbrella policy this year. It provides an additional $1,000,000 coverage for any damages caused by us via car or at our house. And it only cost a few hundred per year.

 

[Courts]

I know of a situation where a child had their own policy but state minimum, was in a bad accident (claims exceeded the coverage) and the other driver decided to sue the parents because the child still resided at home.

Find a good independent agent who knows all the possibilities and can advise you the best.

Insurance is for the "possibilities". You need to make your own decision, but know all the facts first.
.

 

[Rose Pink]

Update: DD decided since it was her car, she wanted her own insurance so that's what she did. She doesn't want our names anywhere on the title or policy. Good for her. Thanks for reminding me to take her name off our policy now.

 

[dougp26364]

Update: DD decided since it was her car, she wanted her own insurance so that's what she did. She doesn't want our names anywhere on the title or policy. Good for her. Thanks for reminding me to take her name off our policy now.

As mentioned in the last couple of posts, make sure she has more than the minimum amount of liablity coverage. Otherwise if there is an accident it still could come back to hauny you. While our kids purchased and paid for their own insurance, they were still required to carry considerably more than the minimum limits. In Kansas, I believe the minimum at that time was $10,000/$15,000. On some vehicles that's only enough to pay for the bumper and, if there ever was more than 1 car involved it could have been ugly.

As it was our son's first accident was turning left on a yellow light in front of either a Ford Expidition or a Chevy Suburban. Either way the vehicle was large and relatively new. I never knew what the bill was for that accident (engine block was cracked on the other drivers vehicle) but I was certainly glad his coverage was $100,000 per accident for property damage.

The funny thing was, the entire time he was learning to drive (private lessons plus time behind the wheel with us), he kept trying to turn left in front of traffic. We couldn't count the number of times he scared us to death and we had to yell and go for that imaginary brake when he did this. After getting his car hit he FINALLY got the point.

One thing the younger generation does the drives me insane is texting on their phone while driving. I work with a young woman who drives a nice BMW that she swears wants to drive 80 MPH (she has the tickets to prove it). Ordinarily I'd say she is a responsible adult but, the other day she was complaining about feeling like she was going soooooo slow at 70 mph so she texted her boyfriend about it and that she wanted to go fast.

Since we work as nurses at a level 1 trama center, I'd have thought she would have had more common sense than that. I'm certain since she's put herself through school and has a responsible job, they're thinking the same way.

Make sure those liability limits are higher than the minimum. Kids may seem like they have it all together but reality often sets in much later in life. I'm often amazed that I survived my youth with some of the things I did.

 

[Kal]

The critical issue seems to be the ADULT daughter's status as an insured. If the daughter is not going to school and if the daughter is not paying more than 50% of her support, there is a good chance that she cannot be added to the policy. I also seem to think there is an age cut off too.

It would really be a serious issue if in the event of a claim that the insurance company denied the claim because she was not elegible for coverage in the first place.

 

[Autoeng]

From personal experience check to make sure that, at least on one of your vehicles (might vary by company), that you are carrrying a good amount of un / under-insured motorist coverage. I drove without that coverage for many years thinking I had "Full" coverage. I was injured in an accident and was limited to a minimal amount that I could recover because I did not have this coverage. With my company I only have to carry it on one vehicle and it applies to all covered vehicles.

 

[Rose Pink]

Thanks for everyone's suggestions. We do carry good insurance and DD has also purchased a good policy. Surprisingly, when I removed her from our policy today they said it would not lower our premium.

 

[Rose Pink]

Surprisingly, when I removed her from our policy today they said it would not lower our premium.

Okay, this bothered me so I called back. Our premium was lowered but the agent I spoke with earlier in the day was already looking at the lowered premium since it had been changed when DD ordered her own policy (same company) yesterday. I feel better now.