Ask Kim


Teenage Drivers and Auto Insurance Liability Limits

Kimberly Lankford

If your family's car insurance liability limit is too low, you could be on the hook for thousands of dollars.



My wife, 18-year-old son and I have a multicar insurance policy with a $300,000 liability limit. My son drives one of our cars daily, but the title is in his mother’s name. Are we financially liable beyond the $300,000 if my son causes an accident? And would it make a difference if the car were titled and registered in his name?

You could be on the hook for any damages above $300,000 if your son – or anyone in your family – causes a major accident. That is a good reason to boost the liability limits on your car insurance, especially if you have a teenage driver, and to consider buying an umbrella policy. With umbrella coverage, you can add $1 million or more to your auto and homeowners liability coverage, generally for $200 to $400 per year. See Why You Should Have Umbrella Liability Insurance for more information.

If the car were titled in your son’s name, he could get his own insurance, which should limit your liability. But it can be very expensive for an 18-year-old male to buy auto insurance coverage on his own; it’s usually less expensive to keep family coverage with a multicar discount. See 8 Ways to Cut Insurance Costs for Teen Drivers for details.

For more information about saving money on auto insurance, see 4 Reasons to Reshop Your Auto Insurance.

Got a question? Ask Kim at askkim@kiplinger.com.



Editor's Picks From Kiplinger


You can get valuable updates like Ask Kim from Kiplinger sent directly to your e-mail. Simply enter your e-mail address and click "sign up."

More Sponsored Links


DISCUSS

Permission to post your comment is assumed when you submit it. The name you provide will be used to identify your post, and NOT your e-mail address. We reserve the right to excerpt or edit any posted comments for clarity, appropriateness, civility, and relevance to the topic.
View our full privacy policy


Advertisement

Market Update

Advertisement

Featured Videos From Kiplinger