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Can I add my child to policy if she doesn't live with me?


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Question: I am going to add my daughter as a co-owner on the title of my car that she drives.  Will that allow me to have her on my insurance, to save money, even though she does not live with me anymore?

Answer: No. If your daughter doesn’t live with you, then you wouldn’t normally be allowed to put her on your car insurance policy, even if you add her name to the title of your car.

We often hear from parents who want to help their children by giving them a car after the child has moved away from home; usually they hope to keep the car and child on the parent’s policy to save money.  Unfortunately, because the car and your child are not located at your house anymore, they cannot stay on your car insurance policy.

Typically, car insurance providers require that to be listed on a policy that the person lives in your residence and that the car being insured is parked at your address at the end of the day.  

The main driver of a car, the address of the driver and the location where the car is kept at night make a difference to car insurance companies because they can be rating factors. Rating factors help determine your risk as a policyholder and thus your car insurance rates.

Since your policy is for a different location, it won’t cover your daughter at a second address. The car’s policy will need to be for the main driver of the car at the address where the car is kept, meaning your daughter needs her own policy on the car.

While adding your daughter to the car’s title as a co-owner doesn’t allow her to be on your existing policy, it is helpful for her when she goes to obtain her own auto insurance policy because now she has an insurable interest in the vehicle.

Most auto insurance companies require the policyholder to have an insurable interest in a car (have a stake in the car, basically be an owner) in order to insure it.

Keep in mind that while your name remains as a co-owner on the car that your daughter drives, her actions can come back to you.

As a co-owner, you have vicarious liability for the actions of the driver. If your daughter is in an accident and her liability limits are exceeded, then you, as the owner, as well as your daughter, as the driver and co-owner, can be looked to personally to pay the damaged party the amount that her insurance doesn’t cover.

Since you can be held responsible along with your daughter for what happens when she drives this car, it’s important that she carries higher liability coverage, if she can afford them. You’d want her to get high enough bodily injury liability and property damage liability limits so that it would be unlikely they’d be exceeded.

Car insurance can be expensive for young drivers, so make sure your daughter comparison shops to save money and gets all the car insurance discounts she is eligible for, such as a good student discount if she is still in school and gets good grades.

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