Expert: Anne - 2/18/2008

Question
My question relates to my 21 year old daughter.  If she has her own insurance policy, but lives at home with us (she is not a student)and car is in her name, are we (her parents) at all liable for any mishaps that may occur?  What if she drops her insurance, can liability transfer to us if she has an accident?

Answer
Hello Scott,

Most likely No, unless you "aid" or "help" to the mishap. However, if the mishap is in your car (you loan her the car) and she gets in an accident, your policy would have to cover the damages.

She is over the age of 18 so she is an adult. The only way you could potentially be liable is if either the damage happens in your vehicle or you negligently to something to be personally liable.

Also, most insurance companies will provide coverage for all residents living in your same household. It is possible that your insurance acts as secondary to hers. In other words, if she gets in an accident and causes significant damages (above and beyond her own policy limits), it is very possible that your insurance possible will step in (as secondary) and provide coverages up to your policy limits. Note, the opposite could also happen, you get in an accident, your policy covers the damages you caused up to your limits, and her policy (which also cover all residents of the same household) would step in as secondary.

The most important thing to remember or do is to have her driver her car and you drive yours.

I hope this helps,

Good Luck,
Anne,
http://www.auto-insurance-claim-advice.com