Skip to main content

Auto Insurance For Your Adult Child

By August 15, 2024Insurance

When your child began driving, you called your insurance agent and added him/her to your insurance policy. Now that your children are growing up and moving on, how do you ensure the auto insurance is correct and providing the proper coverage?

If your child is still a full-time student or living at home, he or she can stay on your auto insurance policy. Unlike health insurance, there is no actual age limit that would prevent your child from remaining on your policy.

Once they move out permanently, they will need their own auto insurance policy. Here are some of the most common questions we get when it’s time to move your child off your policy.

What do I do if my child’s car is titled in my name? Insurance follows the car, which follows the title. If your child’s car is titled in your name, you must go to the DMV and change the name on the title before the child can have an insurance policy in his own name. (Once the change is made, your child will be responsible for state property taxes and registration costs.)

What do we do if my child is moving out of state? If your child is moving out of state, he or she will need to get a driver’s license, registration, license tag, and insurance in that state. (We are licensed in several states and are happy to help with the insurance coverage if we can.)

What if my child will be driving a company car? If so, is the permitted usage for work and personal use, or work only? You will want to check with us to be sure they have adequate insurance coverage in both scenarios.

What do we do if my child is driving a new car? Repairs are costly, so be your child carries both comprehensive and collision coverage. If your child has purchased a new vehicle and has a loan, be sure he or she purchases either loan/lease gap coverage or new car replacement coverage to protect their investment.

How do I explain auto insurance to my child?

Helping your child understand how insurance works is what we do best! We are happy to help by meeting with your child.

Personal auto insurance is a package policy providing coverage for liability, medical payments, uninsured and underinsured motorist coverage, and physical damage coverage.

Your adult child may be familiar with liability and physical damage coverage. Liability insurance pays when you injure another person or damage his/her property (such as their car) in an at-fault accident. This protection is required by statute in nearly every state.

Liability

Drivers are required to carry a minimum amount of liability coverage. However, minimum limits are not enough to protect them following an accident that is their fault. In addition, some our largest claims have been when a client was hit by someone who did not have enough insurance. Always purchase the highest limits you can afford.  

Physical Damage

Physical damage covers the cost to repair the damage to the car, and is provided on what is known as an actual cash value (ACV) basis. ACV payments might be less than you owe if the vehicle is “totaled” in an accident due to the application of depreciation in the loss settlement. If your child purchases a new car, be sure they obtain lease/loan gap protection to avoid a large out-of-pocket expense following an accident. 

Remember – liability pays the other person, while physical damage is required to cover damages to your car. Both coverages are too important to go with only minimum coverage. Click here for a related article by Ross Turner called, “How Much is Enough?”

Finally, please make sure your child knows the importance of regular maintenance on his/her car. Regular vehicle maintenance can cut down on automobile claims. Remind them that maintenance issues are not covered by insurance! Click here for a maintenance checklist created by Travelers Insurance.

Contact us with any questions!