How should parents limit their liability for accidents that their 18 year-old child might have?

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How should parents limit their liability for accidents that their 18 year-old child might have?

Our daughter has been in a couple of accidents already. We are the legal owners of her car and she is on our insurance policy. We want to help her pay for her insurance and keep the cost as low as possible, but do not want to be liable for any additional accidents. What would you advise? Should we transfer the car to her name and keep her on our policy? Or would she need to have her own policy? If we help her pay for her own policy, would we be liable then? If getting her her own policy is too expensive and we decide to keep her on ours, how much coverage should we have?

Asked on November 6, 2010 under Accident Law, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Your best bet is to sit down with an insurance agent in your area to discuss what your options for insurance are here.  Generally speaking, separate policies and separate ownership give the outward appearance of separate liability.  But if she got in to a car accident and I represented the injured party I would delve in to the issues of payment, repair, etc., to see who really owned the policy and the car.  Maybe the court would reject the argument that you are the true owners but I would still probe.  California does not allow "stacking" of auto insurance policies, meaning that you can not get recovery from multiple policies in the same household.  Other states do allow it.  Umbrella policies are often inexpensive and could be worth the peace of mind.  But what you own and your needs are best discussed with an agent in your area.


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