My youngest just graduated a few weeks ago and is about to lease a small townhome and start a job in a corporate IT Department. Salary is in the high five figures. We’re going to transfer the title to him of our 11 year old Subaru. How much liability coverage is reasonable in this scenario? The agent’s initial quote was for 250K/500K, and I am thinking 100K/300K is enough. (FYI, the statutory minimum where we live is 25K/50K – I wouldn’t want him to go down that low.) Our older kid lives in Center City Philadelphia and doesn’t own a car, so we didn’t encounter this issue with her.
We generally get quotes for the higher coverage you mentioned as well as the lower one. If the difference isn’t too huge, we normally get the higher coverage because you never know.
We also get substantial uninsured coverage and underinsured coverage because many people are uninsured and underinsured and I don’t want to have the burden due to their poor choices.
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Your agent is right. The difference in premium is probably less than a couple of hundred per policy period (usually 6 months).
Also, get maximum coverage for uninsured motorists and any other coverage which protects drivers & riders in his vehicle–which most likely will be family members and friends in addition to himself.
I think minimum I’d get is100/300.
My husband served on a jury duty dealing with a case where a guy was left without an underinsured coverage when he switched insurance policies. $250K in medical bills… I don’t recommend skipping this coverage.
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Did he have any general medical insurance?
Yes, but the medical insurance did not pay a cent. Not their circus, not their monkeys.
Are medical costs relating to car crashes generally excluded by medical insurance companies?
Yes, medical expenses of car crashes are supposed to be paid by auto insurance. Your provider will have you complete a questionnaire that no one else has any potential liability for your injuries—auto, homeowner, workplace, etc.
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I’m waiting to hear back from the agent on Tuesday about the difference in cost between 250/500 vs 100/300. Good point about the un- and underinsured motorist coverage. But it’s also my kid who has to pay the bill.
Another plot twist: maybe this was a mistake, but I mentioned to the agent that the girlfriend /roommate(who will also be on the lease) will be driving the car a lot. The truth is, GF does the majority of the driving because kid has a lot of anxiety. I know insurance generally covers you when someone else drives your car with your permission, but insurance companies take the position that someone who lives with you and drives the car regularly needs to be on the policy as a “listed driver.” The 250/500 quote jumped from $1900 (annual) to $2800 when I mentioned the GF.
Background fact, kid is FTM trans but has not legally changed name yet. I’m not sure in AZ you can even change your gender marker, but as far as the insurance agent is concerned the quote is for a 22 year old female. GF is 19, so two “youthful drivers.” GF does not have her own car (or a job yet). At $2800 it’s about $234/month for car insurance.
It’s important to be sure to get the correct coverage and the correct drivers listed if you may have a big issue if/when there is any claim made.
Again, look for discounts for having completed driver’s ed, clean driving record, good student, etc.
My kids were the only ones on their policies as they were the only or main drivers.
Insurer said we didn’t need to list our kids since they only drove when they visited but then they tried to give us grief about not being a listed driver when S had an accident. It was very irritating and we switched insurers shortly after.
Kid does have a discount for an accident free record, apparently from having been on our policy for the last 6 years? For senior year, he had the car with him in MI but the agent said that was okay because he was classified as “away at school.” Apparently GF was doing most of the driving then, too, but we didn’t know it.
But now that’s he’s graduated and getting his own place, the agent says he needs his own policy. And much as it kills me to have him pay an extra $900 for GF, it seems like the prudent thing to do. Otherwise I can just imagine the questions after an accident: do you live together? Is GF on the lease? How often does GF “borrow” the car? (every day).
Ask what other discounts the drivers may qualify for—never know if you don’t ask. Sometimes they give an extra discount if you take a course or whatever. Also check to see if another company may provide better rates. Sometimes an independent agent can compare companies and find you a rate with a good company you weren’t aware of.
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I’ll keep checking on discounts, but the agent I am mentioning is independent and says she checked several companies and Travelers gave her the best quote. DH and I are with Nationwide.
Expensive. You need to be realistic about affordability as insurance is required by law and coverage that is too costly will likely expire due to non-payment of premium.
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That is NOT my understanding - but I’m NOT an insurance broker.
They’ll font-end it… but, I think IF you have medical coverage, you can get an auto-insurance discount because then (at least in our state) your auto insurer will try to get reimbursed by your health insurer for YOUR medical expenses, or even act as the “primary” insurer.
It gets tricky though, because if the other driver is at fault, then your health insurer and the other automobile carrier might fight:
It’s called subrogation. I can’t speak to laws in every state but I’m in MA and can speak to here since I work for an insurance company.
If you’re in an auto accident and end up in the ER they will take your medical insurance card and bill your medical insurance. Due to the reporting they get they’ll know it’s related to an auto accident and will request that information from you to work with your auto insurance for reimbursement.
Your auto insurance will then sort out any issues of whose auto insurance should be covering the accident.
Related to the broader thread the GF either needs to be on the policy with your child or she needs her own insurance. Otherwise an uninsured driver is driving the car. If she has her own insurance I would feel no obligation to add her to the policy. 100/300 coverage IMO is insufficient these days. Pretty easy to reach those dollar thresholds and they’ll be liable for any costs over/above it. If they don’t have much in the way of assets now is irrelevant since they can attach future earnings if it’s something egregious enough. My $0.02.
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Also - has your kid checked into the benefits of their employer? Many large employers will have a program for a discount through an insurer and in some cases will administer payment through payroll deduction.
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That’s a good idea and definitely worth checking out! He is working for a large employer.
Just to follow up, we decided on policy limits of 100/300 and included the girlfriend/roommate as a listed driver. She has no other insurance and drives the car almost daily, so it seemed too risky to not list her. We looked on his employer’s benefits webpage and got a quote from Farmers with a supposed employee discount. That quote came out the same as the Travelers quote I had gotten from my independent agent. So we went with Travelers just because it was easier to do everything through one person, including renter’s insurance and taking both the car and my kid off of our own policy.
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