An insurance question.....

[recycled sixtie]

If you have a son or daughter insured on your same auto policy as you, are you concerned about their actions if for instance your child is at fault and causes liability exceeding say the amount covered on the ins. policy? Can the ins. co. come after your personal assets if the liability amount is exceeded?

What to do? Sell the auto to your child for a $1 and then have them on a separate policy from you? Better safety could be that your child is with a separate ins. co. altogether? My daughter is graduating from univ. in a few weeks and I think that I can get a reduced premium for her if she owns the car.
She supposedly would be even more responsible seeing that she owned the car? Your thoughts please!

[Mookster]

A general answer to this general question, the vehicle owner and driver are ultimately responsible for property damage and injuries when a loss occurs. If the "damages" exceed your auto policy limits, you could be held responsible for the excess exposure (damages beyond the stated policy limits). Keep in mind your insurance carrier will attempt to resolve the claim within your policy limits and does owe you a defense if this situation should surface.

If you are worried about your exposure, insure to your risk (low exposure low limits, high exposure higher limits). To address you issue of insurance and children to minimize your risk, not your children's risk, you could buy them a car, title it in their name and secure a separate auto policy for that vehicle. Keep in mind this works for children age 18 and older.

Discuss with your attorney, insurance agent or insurance company to apply state laws or specifics to your personal issues.

[MRM]

Mookster appears to be an experienced attorney who practices in this area. He gives good advice and writes well. You can trust his advice.

In general, the owner of the car will be responsible for any damage done with it, regardless of who drives it. Your insurance will cover any losses up to your policy limits, and they are required to try to settle the claim within policy limits so you don't have excess exposure, but they can't cover everything. Your insurance company cannot come after you to repay the damages they have to pay for. If you do not have enough insurance to cover your son's accident, the person he hurt might pursue you for whatever damages exceed insurance coverage.

Your best bet is to have your son own his own car with no join ownership or contribution from you so his titled ownership doesn't amount to a straw buyer, and you're found to be the owner anyway. Then make sure he insures the car separately. You could even pay for the insurance as long as it was a different policy. But even that would require a lawyer in your state to review and structure to avoid potential liability to you.

The best practical strategy for avoiding excess liability is to buy good liability insurance and then supplement it with an umbrella policy, called a PLUP, or personal liability umbrella policy. It covers almost everything you can imagine, depending on the language of the policy, and is the absolute best bang for the insurance buck. A million dollar PLUP is probably an additional 500 bucks on top of a decent $300,000 liability policy, and a second million in coverage is probably another $300. I either have two or three million coverage through my PLUP, I forgot which. You might be best off just getting a quote from your current insurer on a multimillion dollar PLUP and include the kid on it.

Once again, this is a general statement of insurance principles and is not legal advice. You must consult with an attorney in your state who is familiar with auto insurance law to receive legal advice on which you can rely. Do not take more that 2 pills in 4 hours or more than 8 pills in any 24 hour period. Side effect can include unsightly blemishes and a small but statistically significant population of the test group reported the loss of one or more major organs. Objects in the mirror are closer than they appear. All stunts were performed by professional drivers on a closed course and should not be attempted at home unless you stayed at a Holiday Inn last night. No warranty, either implied or express, is extended by the reading of this thread. All depictions of violence were simulated; No live animals were harmed in the writing of this thread, although we are not really oppsed to that sort of thing. All mispellings and weird word choices were caused by the autospell feature on the iPhone 4 and are the responsibility of Steve Jobs, not the author. For further side effects and warnings, please refer to our website: tortsareus.com, title 42 of the US Code, and most of the DSM -IV.

[Bob Kontak]

My son received an underage DWI at 18 years old. Blew under the adult limit but anything over .02% for underage in Ohio is a bust. My insurance company canceled my $1MM liability umbrella immediately so some research is warranted.

[recycled sixtie]

I do appreciate all the info. you have given me. I also check your caveats!I will do my due diligence. Thanks.