As a parent, wanting to make things easier for your adult child is probably your first response, especially if you know that he or she has been having a tough time lately. Unfortunately, some of the ways you might want to help could actually become very problematic down the road for everyone involved, including the insurance company. The following examples are common situations that you should avoid participating in whenever possible.
Your Adult Child Buys Or Is Given Your Car...And You Keep The Car Insured Only Under Your Name
It is not unusual for parents to give or sell an adult child a vehicle they don't need when it's time for the young adult to move out on their own. However, it is crucial that when you give them the title of the car in question, they also take over the full burden of maintaining insurance on the vehicle. While it is often cheaper to keep your existing policy or easier to simply to avoid making those changes right away, you might find that in the event of an accident, the insurance company might decline to make a payment.
That could happen if the insurance company has reason to believe that the policy was obtained fraudulently. Unfortunately, failure to provide the appropriate information about the primary owner or driver of the vehicle or the address where the vehicle is kept could be seen as fraud. In that instance, payment after an accident or damage to the car could be denied and your entire policy could be canceled.
Allowing An Adult Child To Use Your Vehicle For A Delivery Job
Given that as recently as September of 2015, 7.8 million people in the United States had more than one job and getting a job as a delivery person for restaurants is often pretty easy, it only makes sense that many adults need a reliable car with good gas mileage in order to get the maximum benefit from their second job. If your adult child does not have a vehicle of their own or if the automobile they own would not be appropriate for delivery work, he or she might benefit from using yours. However, you may find that allowing your vehicle to be used for commercial purposes is a violation of the agreement you have with the insurance company since using a car for delivery purposes typically requires a commercial insurance policy.
Therefore, you should verify what is permissible in that situation from your insurance company. Until and unless they are willing to provide that coverage under your existing policy or a new policy is implemented that will cover that type of use for the vehicle, it is best to not allow your son or daughter to borrow your vehicle for a delivery job.
The insurance you carry on a vehicle is a legally binding contract that you are expected to adhere to in order for the policy to remain in good standing. The above examples of situations where making a less than ideal decision to help your child could eventually result in new and significant burdens for you. Therefore, be sure to mention and discuss any pertinent changes with your automobile insurance agency in a timely manner to avoid problems later on.Share