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If my child moves out and takes my car, can I exclude her?


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Question: My daughter has moved out of the house and is living with her boyfriend.  The car she uses is registered to me and insured under my car insurance policy.  Since she is no longer considered a resident household member, can I exclude her from the policy?

Answer:  No. You don’t want to exclude your daughter from your policy.  If you did, then while she is driving your car she wouldn’t have any auto insurance covering her if she were to be in an accident.

Excluding someone from your policy means that your car insurance policy coverages will not be extended to that person if they operate your vehicle. 

If you daughter drove your car as an excluded driver and was in an accident, then both of you could be held personally liable for any damages she caused to others and the cost of repairs to your own vehicle.

As the car owner, you have vicarious liability for those that drive it.  That means even if you aren’t driving it, you can be held responsible for the actions of others that drive your car, such as your daughter. 

If your daughter is going to continue to drive your car and keep it at her new residence, you need to inform your car insurance company. Most auto insurers won’t cover a car that is not garaged at the policyholder’s address, so they will likely advise you that your daughter will need to get her own policy.

Each insurer is different, but many will grant you a time to make the needed changes and continue to cover your car and daughter during that time.  After she gets her own policy, you should be able to take her and the car off your policy.

For your daughter to get her own car insurance policy, you may need to add her to the title of the vehicle, or, if you plan to give her the car, just sign the title over to her.  Most car insurance companies require that the person insuring the car has an insurable interest in it.

Without your daughter on the title, she may still be able to find someone to insure her.

Esurance does allow this in certain situations, but your name would still have to appear on car insurance as the owner, and as the owner you would continue to have vicarious liability for her actions.  Thus, if her limits were exceeded in an accident, the damaged parties could still come after you.

If you fail to notify your insurer that your daughter moved out with your car and tried to keep the policy as-is, then you could run into problems if she were in an accident.

Depending upon state laws, your insurer could be able to say that you misrepresented to them who was driving the car and where it was located and deny claims based on this form of insurance fraud.

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