Young adults and car insurance

[Carrie12345]

What’s the deal?

Dd (18, not a student) is on our car insurance.  
I was on my mom’s until I was 22 or 23.  
My FORTY year old sister is on our parents’, and doesn’t even live with them right now. (Shh.)

I’m working on shopping home and auto insurances, and my current homeowners (not auto) is telling me I can’t insure dd because she owns her car. That no company can; she, as an 18yo new driver (with one accident, to boot) has to have a separate ($$$) policy.  My current policy insures her, and lists her as the owner of the car. I owned my own car as a kid. My sister owns hers. This isn’t making sense to me.

[Bambam]

I think you should call around. Both of our daughters own their own cars and they are both on our auto insurance policy. 

One odd thing about our policy is there can only be 3 cars on one policy, so we have two policies to cover all four cars, but we still get the discounts/etc - it just seems to be some sort of weird paperwork thing. 
 

[Katy]

That sounds nuts to me. Maybe it’s a company policy not a state insurance one, or maybe she’s lying to increase her commission. Try State Farm?  I’ve had good luck with their agents since we married.  The rates are usually half the cost for twice the coverage of USAA.  I did have one State Farm agent who lied to me repeatedly when I was 18-20. 

[Ailaena]

Perhaps the person telling you this was misinformed, perhaps it is a quirk of your state, or perhaps it is specific to that company because I recently insured a car somebody else technically owned.

not only that, my mom is on my policy with her car in her name and my boyfriend has a policy bundled with his home insurance for him on his car which is in my name.

it’s been my experience that insurance companies don’t care who actually owns the car, only who drives it.  

[Bootsie]

Our insurance agent has told us that insuring a car titled to someone over 18 is tricky.  They will do it in certain instances but do not like to.  The problem comes in that if there is a claim, the person who has the policy is not the person who has sufferred a loss (decline in the value of an asset).  So, if I have a policy and DS has a car that is worth $10,000 that is titled in his name and the car is stolen, I have not suffered a loss of $10,000, DS has suffered the loss.  

[Carrie12345]

3 minutes ago, Bootsie said:

Our insurance agent has told us that insuring a car titled to someone over 18 is tricky.  They will do it in certain instances but do not like to.  The problem comes in that if there is a claim, the person who has the policy is not the person who has sufferred a loss (decline in the value of an asset).  So, if I have a policy and DS has a car that is worth $10,000 that is titled in his name and the car is stolen, I have not suffered a loss of $10,000, DS has suffered the loss.  

It’s still rather nonsensical to me. “My” car is legally owned by Dh, but I sure would suffer the loss, lol. And whether dd has her own policy or is on ours, the purpose and outcomes are the same. 
 

The whole thing makes me sad. There’s no consistency to how we handle young adults in the US.

[Pawz4me]

I've never known anyone to be able to insure a car they didn't own. It's strange to me that anyone would think that was possible. Although . . . maybe it varies according to state law?

DS25 technically owns his car, but the title is in my and DH's name so we can keep it on our insurance and save him a LOT of money. He pays us for the insurance costs, vehicle titling, property taxes, etc., of course.

[Tenaj]

We've always had to put either my dh or myself as a joint owner on the car in order for their cars to be added to our insurance.  So far, each kid has then replaced that car when they were well over 21 so at that time they don't need our name and can get their own insurance.

[Bootsie]

1 minute ago, Carrie12345 said:

It’s still rather nonsensical to me. “My” car is legally owned by Dh, but I sure would suffer the loss, lol. And whether dd has her own policy or is on ours, the purpose and outcomes are the same. 
 

The whole thing makes me sad. There’s no consistency to how we handle young adults in the US.

It has to do with "insurable interest" and legally who has a claim.  Depending on the community property laws in your state, the financial and legal relationship between spouses is much different than that of a parent and a child who is no longer a minor.  

Legally, the purpose and the outcomes are not the same.  You pay for insurance to protect you from the loss of value in an asset.  That is legally different than paying for insurance to give you money if someone else losses the value of an asset.  If there is a claim in which the car is totalled, does the insurance company need to write a check to you, who has the insurance policy?  Or, does the insurance company need to write a check to the owner of the car who has that has been totalled?  

[Carrie12345]

2 minutes ago, Bootsie said:

It has to do with "insurable interest" and legally who has a claim.  Depending on the community property laws in your state, the financial and legal relationship between spouses is much different than that of a parent and a child who is no longer a minor.  

Legally, the purpose and the outcomes are not the same.  You pay for insurance to protect you from the loss of value in an asset.  That is legally different than paying for insurance to give you money if someone else losses the value of an asset.  If there is a claim in which the car is totalled, does the insurance company need to write a check to you, who has the insurance policy?  Or, does the insurance company need to write a check to the owner of the car who has that has been totalled?  

Well, it won’t matter because she doesn’t have that kind of coverage. 😉 Her car isn’t worth enough.

Until last month, we would have received health insurance claim payments on her behalf, and no one sees an issue with that until “kids” are 27.

[Murphy101]

This is why my name is listed on their cars as “son/daughter or my name”.  BUT none of them have a car loan for those cars either.  It’s owned outright so they can list the title anyway they want. 
 

When they decide they want to get a loan and I’m not on the title bc I won’t co-sign  then they get their own car insurance.  But they weren’t living with me or listed as my dependents when they got to that point so far. 

I don’t know that I agree with you that it is presumed the result is the same.  Even for my young drivers that I do list as my dependents - I do not mind them getting our bundle discount but they pay for their own car insurance portion and deductibles and it is their car and so forth. So it should payout to THEM, not me.  But who should the payout go to if the car is not owned by the same person as the insurer? What if let’s say an 18 year old adult pays is cash for their car and mom offered to pay insurance and then didn’t give the payout to the 18 yr old so they could repair or get another car? Sad to say I have seen that happen to a college friend of one of my grown kids. He had an accident when snow came and his mom decided she had better uses for the money and now he has no car and no insurance either. (And apparently a really 💩 mom but that’s not his fault.)

And do not even get me started on money and marriage. Why is it I’m not allowed complete access to my husband’s income unless he decides to let me have it in writing but I’m completely responsible for every single debt he may get without my signature?

On the up side though. I did just use his income to buy a new van and with the same income Dh would not have qualified for the loan. Because my credit is better than his, even though I have not earned a wage in 20 years. I mean. I’m glad bc I have a new to me van. But the entire American insurance and credit rating boondoggle system is ridiculous. 

[Carrie12345]

3 minutes ago, Murphy101 said:

What if let’s say an 18 year old adult pays is cash for their car and mom offered to pay insurance and then didn’t give the payout to the 18 yr old so they could repair or get another car? Sad to say I have seen that happen to a college friend of one of my grown kid

Yeah, that would be awful.  
It’s also why it’s stupid that 18yos aren’t considered independent when applying for financial aid.

Kids are kids or they’re not, dang it!!!

[Loowit]

We sold our DD our car recently, but kept DH on title so that it is both their names so that she could stay on our insurance.  I talked to my insurance agent ahead of time to figure out the best way to insure her.  If the car had gone into her name only she would have had to have her own policy according to my agent, and would have been paying about three times as much.  She just pays me her portion of the insurance each month.

[City Mouse]

Geico has a special deal where adult children can get their own policy but pay the same amount that it would cost to insure them on the parents account. However, we still pay my DD’s auto insurance, and her caris only in her name. The insurance company did not have any problem with it because she livened in our house. I guess there might be an issue if she didn’t. We insure an 18 yr old boy, so the cost for a 25 yrold female has next to nothing to our bill. Our cars all all old, cheap, and paid off so that might make a difference.

[BusyMom5]

I was always told that the insured should be the same as the owner on the car title, otherwise you are insuring a property that does not belong to you, which makes no sense!  If you own a car you can add a non-owner as an insured driver to your policy, but you can't add a vehicle you don't own.  To get around this, put the title in your name as well.  

[Murphy101]

3 hours ago, Carrie12345 said:

Yeah, that would be awful.  
It’s also why it’s stupid that 18yos aren’t considered independent when applying for financial aid.

Kids are kids or they’re not, dang it!!!

I agree.

[fairfarmhand]

Insurance agents lie.

I've experienced this kind of nonsense personally.

[Bootsie]

4 hours ago, Carrie12345 said:

Yeah, that would be awful.  
It’s also why it’s stupid that 18yos aren’t considered independent when applying for financial aid.

Kids are kids or they’re not, dang it!!!

We do have a lot of inconsistencies when it comes to expectations, rights, and responsibilities of young adults.  

In this situation it is easy to look and think it would be to your advantage to be able to pay for an adult child's auto insurance as part of your policy because of the money savings.  Car insurance may be protecting the value of an asset but it also provides financial protection in the policy holder causes an accident.  To say that a 20-year old has their own car and is responsible for any accident that they may have (and needs to have insurance to cover that) in the big scheme of things may be better for parents of young adults than having potential liability financially if the young adult does cause an accident.  

[Carrie12345]

9 hours ago, BusyMom5 said:

I was always told that the insured should be the same as the owner on the car title, otherwise you are insuring a property that does not belong to you, which makes no sense!  If you own a car you can add a non-owner as an insured driver to your policy, but you can't add a vehicle you don't own.  To get around this, put the title in your name as well.  

I promise I’m not trying to beat a dead horse here, lol. I just find it so inconsistent with other aspects of that age bracket.  All of her other personal belongings are covered under my homeowners policy. Her phone is covered under my account. Until a couple of weeks ago, her literal body was covered under my health insurance. But she’s expected to pay a whole bunch extra for driving insurance because she had the nerve to purchase her own cheap little car. Sigh.  And then, if she had chosen traditional college, her costs would be based on her father’s income.  It’s all nuts!
 

Honestly, it’s a somewhat temporary situation, so I don’t think we’ll be changing the title, but I’ve considered it. She is planning to get her own apartment, but the one she was expecting didn’t pan out. She’s got her own car and a good income, but it’s hard to find someone willing to rent to someone her age. Grr!

 

[cjzimmer1]

My 2 oldest own their own cars.  My insurance company didn't care in the slightest who owned the cars or even who drove which car.  They said they treat it as a unit because they expect that in families, sometimes people will drive different cars than their own (which is true for DH and I but not for the kids).  Which I get but it kinda sucks because the cost to insure DH and my vehicle is higher because they assume the kids might drive them.  My kids are responsible for their own insurance and I told them I'm not paying for the increased cost on my vehicles either.  The insurance company just shows us the cost of each vehicle (which includes the risk from any of the 4 drivers) so each year I have to call the company and have them remove the kids and their vehicles to tell me the true cost of DH's and my portion and then the rest is divided between the kids (thankfully their cars are nearly identical in cost to insure so at least it's easy to just split the difference) and then put them back on.

[Bootsie]

4 hours ago, Carrie12345 said:

I promise I’m not trying to beat a dead horse here, lol. I just find it so inconsistent with other aspects of that age bracket.  All of her other personal belongings are covered under my homeowners policy. Her phone is covered under my account. Until a couple of weeks ago, her literal body was covered under my health insurance. But she’s expected to pay a whole bunch extra for driving insurance because she had the nerve to purchase her own cheap little car. Sigh.  And then, if she had chosen traditional college, her costs would be based on her father’s income.  It’s all nuts!
 

Honestly, it’s a somewhat temporary situation, so I don’t think we’ll be changing the title, but I’ve considered it. She is planning to get her own apartment, but the one she was expecting didn’t pan out. She’s got her own car and a good income, but it’s hard to find someone willing to rent to someone her age. Grr!

 

I agree that it really is a mess.  Sometimes it is difficult to even try to figure out how a young adult is classified.  They have to be allowed to be on my medical insurance, but I can't know what the bill is for unless they tell me.  They are wise enough to vote but not choose to drink a beer.  In Texas, at least, they can get a pilot's license and fly a plane at a younger age than they can drive a car.  They can shoot a firearm but not drink a glass of wine.  Parents do not have a right to academic information but the young adult has to file the parents' financial information.

We had a situation (pre-COVID) where DH and I were going on a cruise with DS who was 20--we had trouble getting DS his own cabin--because he wasn't an "adult" and an "adult" had to be in each room.  If he brough along a 21-year old friend it would not have been a problem.  So, really, would they prefer a 20-year old going on a cruise with his parents in a room. Is having a 20-year old and a 21-year old in the room really LESS risk of having some partying the cruise line woud rather not have happening?  

Then you add in the fact that if a 20-year old is married they all of a sudden fall into a different category for many things...

[elegantlion]

My son has his own policy as he's on his own title. My mom and I share a policy because the other two cars are titled on our name. He was over 18 when he got the car though. 

 Since insurance is state-regulated, some may exceptions for those still in the household, while sometimes agents might fudge who owns the car to get a policy through underwriting. I'm trying to remember what our policy was - I worked in underwriting eons ago.