Auto insurance for 18 year old

[hoofaman]

Our 18 year old daughter lives is a senior in high school and lives at home with us. In the fall she is going to an in state university about 2 hours away and will live on campus there but might come home on the weekends.

Right now she is driving a car titled in parents names and she is named on the policy for that vehicle, along with me as we share the vehicle but I don't really drive much.

She increased the cost of our 5m umbrella from $1,000/y to $3,400/y.

The umbrella makes sense to protect the parents from liability, but daughter doesn't have any assets or income. Is it reasonable to transfer vehicle title to her, get her her own policy with high limits but without the umbrella? From a risk standpoint I can understand why the umbrellas premium increased as it covers daughter, but I'm not clear on what the benefits of an umbrella would be to someone with no assets/income? Also if she is living in our house and being supported by us, I'm not sure if this policy shuffling actually accomplishes anything from a risk mitigation standpoint since she is a financial dependent of ours at this time.

Even if she got in an at fault accident in our current situation with car titled in my name, and I was named in a lawsuit as the owner of the vehicle, wouldn't the umbrella still payout in that case if I'm named/targeted even if daughter wasn't on that policy?

[scifilover]

It would certainly be less expensive for her to be on her own policy....however.....as long as she is a resident of your household, she will be considered an exposure on your Family Auto Policy. I just went through this discussion with my oldest son about his children. His situation is different. His daughter just graduated in Dec and has a job lined up with a local school district in another state. She has her own apartment and income. As such, she is legitimately no longer a resident of his household. I suggested that he put her car into her name and get her her own auto policy. In your situation, given that she is in the dorm, she is still considered a resident of your household. You could try discussing this with your agent. Even if you put the car into her name and get her her own policy she would need to be excluded in writing from your auto insurance and umbrella. The efficacy of these exclusions varies by state. What a lawyer would do, in the event she was involved say in a fatal accident where she was at fault, is to try to break the exclusion and get into your $5M umbrella.

[popoki]

At 17, daughter caused a minor fender bender which increased our umbrella so much that we dropped it.

At 18, we gifted vehicle to daughter and she got own insurance, and moved away. She then totaled vehicle. No effect to our insurance.

She got replacement vehicle then totaled vehicle at 19. Again, no effect to our insurance.

If we had gotten a new umbrella, I doubt that it would have been affected in any way although it would have remained high until the 1st totaled vehicle rolled off the LexisNexis report.

Unlike in your case, our daughter's permanent address was no longer our permanent address.

[Jack FFR1846]

Your proposed change will cost you MORE money.

Anyone in the household who ever drives the car needs to be listed on the policy. SOME insurance companies will give you a student-away discount if the college is at least 100 miles from home. I'll emphasize SOME. Not all will.

If you transfer the car to her, she would then list the car as being registered exactly where? If at the college, the risk is likely higher, thus a higher cost. Liability is the expensive part for new drivers so whether she's driving a new Mercedes S class or 30 year old Honda Civic, the liability is still going to be expensive. In my state, this doesn't drop until the driver has 6 years of driving experience (has been licensed for 6 years).

The only real way to reduce your costs would be for her to surrender her drivers license and no longer drive. When she independently moves out of the house, she could take a new driving test, get her license back and pay the $5k a year it'll likely cost her for the first 6 years.

[ChicagoBear7]

We were advised to just keep our kids and cars on the family policies when the kids were in college. Between the "family car doctrine", "vicarious/but for" liability (which are typically developed through case law, not statutory law) and having to drive through several states to get to college, it would be hard to be sure you had minimized exposure. We were told the answer would be different if junior had a full time job and paid for their own costs of living.

If you are going to put everything in a destitute college students name, I would make sure they had their own umbrella. Sending them out into the world with state minimum coverage is asking for trouble. Judgements can last 20 years and can be renewed. Bankruptcy might discharge the debt, but it can also discharge potential careers in banking, financial services or any job needing a security clearance. I would not play Russian Roulette with my kids future to save a few bucks.

[ccieemeritus]

We pretty much did as you suggest:

My daughter was primary driver of one of our cars.
When she turned 18 we transferred ownership of that car to her and changed the auto policy on that car to her name.
We kept _high_ levels of coverage and paid the insurance bill, but she was not covered by umbrella.
All household members were listed as authorized drivers on all cars in the house.
DW and I had an umbrella policy which I don't believe covered the daughter's car.
The mailing address on daughter's policy was our permanent home, but we made sure to update the "garaging" zip code to her school zip code.

I was happy with this arrangement. Fortunately it was not tested by any major claims.

[Marq1]

It would certainly be less expensive for her to be on her own policy

There is absolutely no certainty to that.

Just went through the same exercise with my 22 year old son, on our policy, $1100 per year, the cheapest policy we could find on his own $2000.

Every state is different.

[retired recently]

DS had our 09 Sonata at uni a few states away. He mentioned that some of his friends drove the car sometimes so when he came home I put the car in his name and explained my rationale and the risks involved to us. Unfortunately, a few months after transferring the Sonata broke down so I let him have our 22 Camry until I could get his sorted and told him that only he was to drive it.

We were abroad for six weeks so I had my 80 year old dad drive the Sonata while we were all away to see if the problem was fixed. Dad is not the best driver. Son asked what happens if the car is wrecked and I said well unfortunately your insurance rates will probably get impacted going forward. I told him this was karma. ))

So far, no one has had any wrecks and son is coming home to switch back soon.