Our son is 18 but lives at home. Our CPA says he should have his own car insurance policy and he only needs minimum limits because he has no assets. Is this a good idea?
Should Our 18 Year Old Son Have His Own Car Insurance Policy?
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Also, the liability limits are likely to be above the mandatory state minimum limits. For example, if the state minimum requirement is $15,000 per person, and $30,000 per accident, the household plan may be $100,000 per person and $300,000 per accident.
Additionally, if the young driver gets a moving violation or is involved in an at-fault accident, it is less likely a cancellation will occur if the vehicle is covered under a parent's plan.
So...Do you really want your own policy? You can get it, although the title may have to be in your name.
Important Note: This answer was provided by Edward Harris, one of the nation's premier car insurance experts. His top-rated website Carinsurancezoom.org provided free online quotes and the lowest auto insurance prices from top-rated companies.
Your son's age group is the highest at risk group for an auto insurer. As such, that means they are much more likely to have an accident, get a ticket, or cause major damage to themselves or others.That risk means that the insurer will hedge their chances of having to pay out by charging much higher rates for them. If he's a safe and careful driver and the company offers safe driver discounts, he may come out ahead, but if there's an issue, his rates would increase even higher.
By putting him on your policy, he gets the advantage of better coverage than what he could afford, and lower rates, as he's listed as a driver under your policy. If that's affordable for you, perhaps it would work out better to keep him there until he moves away, or has a couple of safe driving years under his belt. That said, maybe the responsibility of having to pay for himself might be impetus enough to be careful and safe...
I hope that gives you something to work with as you try to decide. You know your son better than anyone, and I'm certain that you will make the best choice for him. Thanks for asking!
Now, should have have his own insurance? Assuming he owns the car, he probably needs his own insurance. Staying in the household under household coverage is also OK but some insurers concern themselves with the owner of the car being different than the insured on the policy so proceed with caution when the vehicle is not actually owned by the policyholder.
As a practical matter, the discounts that you might enjoy are lost to the child in many cases when they have their own policy. Some companies will extend multi-policy discounts to children of the policy owner. Some discounts don't come through this connection, however. I like kids learning the responsibility of maintaining their own insurance. It gets the loss off the parents record, for one. Parents can help subsidize the cost if they want and help provide this as a reward for good outcomes on something else. All things said and done, I like responsible children on their own policies but deal with young drivers both on and off the parents policies so it comes down to personal preference and whether you are dealing with issues that poison the whole policy because of the young driver, or not, in many cases.