My husband and I own and insure the car that our 22 year old son drives. He has now completed college. We would like to gift the car that he currently drives to him and have him purchase his own auto insurance. Our goal is to limit our own personal liability if he should have an accident. He has no assets. He lives at home and works about 30 hours a week. Am I missing anything with this approach? Am I correct that we would not be liable for him if the car and insurance are in his own name? Thanks!
22 year son - limiting our personal risk
- Thread starter kday
- Start date
- 2,265
No real issue with gifting the car. Make sure his coverage matches yours until he moves out and it doesn't matter who pays the premium. His new premium will be much higher
- 5,290
If he owns the car in his name only, and has insurance in his name only, then god forbid he causes and accident, it's on him. There is no connection on the liability to you. He is just renting a room from you.
Just like if I rented a room from you and hit someone crossing the street. They'd have no reason to go after you. They could try, but I don't see it going anywhere.
Just like if I rented a room from you and hit someone crossing the street. They'd have no reason to go after you. They could try, but I don't see it going anywhere.
- 2,265
If he uses their address and matches their coverage AND the car is in his name only, AND any lien is in his name only, there is no way anyone can reach through to the parents. If his coverage is less or any document has Mom or Dad's name, an attorney will reach through to the parents. Just make sure that the coverage matches. Could be best to get a PO box for his mail
- 5,290
Oh, right, the lein too. Good point. Also an interesting point about matching the coverages and the p.o. box.
- 2,625
Yes.
1 - As long as he resides in your home he can drive your cars as well as his own and you'll continue to pay his high rates on your policy even if he owns his own car and has his own policy unless you are able to get him a policy with your own insurance company.
2 - You limit your personal liability by having insurance. As long as he is living in your home a personal injury attorney can name you in a lawsuit even if you are later absolved of liability.
Here's an alternative. Retain ownership of the car. Keep it on your policy. Take advantage of the multi-car and home-auto discounts as well as the lower rates already established for him as a driver on your policy. Have him pay his share of the premium if he is able to.
As a college graduate he is probably more of a responsible driver than he was as a teenager. And if he was a responsible driver back then, he probably still is.
I provided a car for my daughter and kept it on my policy until she moved out at the age of 24.
You can probably save a lot of money on insurance for a couple more years while he lives at home.
Could he cause an accident and make your rates go up? Of course. But the odds are just as good that you could.
- 5,290
You think the op is as likely to cause an accident as her 24yr old son? You also believe that her rates would go up as much as an accident caused by a 24 yr old?
Whatever you're smoking, pass it on. I'd like some, because you are high as hell.
- 2,265
If he has his own policy he can be removed from parent's policy as a driver. He should get a PO Box for all of his mail and use the address of parents as garaging address. This would limit their exposure.
- 2,204
Its a Solid Approach, but nothing is fool proof.
Make sure you have a legal document for the "Sale" or "Transfer" of the vehicle. Also make sure the thing is fully transferred over at the DMV.
Make sure you have a legal document for the "Sale" or "Transfer" of the vehicle. Also make sure the thing is fully transferred over at the DMV.
At about age 20, I gave my son a car and he got his own policy on it (through our company), while he still lived here. Didn't want his recklessness on my policy any longer. Ironically, it wasn't that expensive for him because his car was old, and he had a decent record. He had plenty of coverage, just no collision. He now has a different car with full covg and pays less than $100/mo. Almost 3 years on his own policy now.
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