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Hello all:)
I am the proud father of a very responsible soon-to-be 18 year old
son. I am contemplating transferring the title to the car that he
drives to him when he reaches his 18th birthday. My thinking was that
in the event that he were to have an accident in *his* car, it would
be somewhat difficult to name me as the defendant. I have spoken to
my insurance company agent, (State Farm), and they haven't really been
all that clear as to how this would impact my policies (auto and
umbrella).
It would be my intention to continue to pay for the insurance as he
will be in college and there is no lien on the car to be concerned
about.
My real objective is to just to lessen the chances of some sort of
suit against me, as I do have assets that I would like to protect. I
would think that by lessening *my* exposure, it would also reduce the
cost of my umbrella and I should be able to insure him for lesser
liability limits than I carry, but I haven't been able to get a clear
answer on any of that from State Farm. They said they did believe
that *we* would still be entitled to the various renewal credits and
multiline discounts, etc, but insurance costs aside, my first priority
is just insulating myself from any claims that may arise out of his
driving "his" car in the future.
Does anyone have any insights as to whether this is a viable plan or
if I may be overlooking areas of concern?
Thanks:)
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On 16/3/04 12:33, in article 1tsd5059jvdsof6ia05kp3jmvkh986qso0@4ax.com,
"felton" <felton@hotmail.com> wrote:
Does anyone have any insights as to whether this is a viable plan or
if I may be overlooking areas of concern?
It makes sense to transfer the car.
What impact that has on your insurance depends on the insurer. My daughter's
car is insured under my family USAA policy, so all discounts apply. And she
is 32, living at home.
Nothing will stop a claimant from suing you if you have deep pockets. But if
your insurance is well planned and the transfer is not a subterfuge (with
you retaining control and possession), and especially if your son's car is
insured with the same firm (and even if other members of the family are
listed as named insureds) you have done all you can.
But use the same insurer for everything, if possible: you don't want
companies battling each other to disclaim liability, all at your expense.
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Hello all:)
I am the proud father of a very responsible soon-to-be 18 year old
son. I am contemplating transferring the title to the car that he
drives to him when he reaches his 18th birthday. My thinking was that
in the event that he were to have an accident in *his* car, it would
be somewhat difficult to name me as the defendant. I have spoken to
my insurance company agent, (State Farm), and they haven't really been
all that clear as to how this would impact my policies (auto and
umbrella).
Probably not much or any at all, if you are keeping him, and the car,
on the same policy. It probably doesn't even matter to the ins. co.
whose name the cars are formally titled in.
It would be my intention to continue to pay for the insurance as he
will be in college and there is no lien on the car to be concerned
about.
Chances are your policy premium will not change at all.
My real objective is to just to lessen the chances of some sort of
suit against me, as I do have assets that I would like to protect.
Depending on the law of your state, the chances are pretty slim you
would be held liable for your son's driving anyway, unless there is a
"presumptive liability of owner" statute for the acts of the driver,
as in D.C. f'rinstance.
The other main ways you could be held liable for your son's driving
are (a) if he were acting as your agent or employee at the time of the
wreck, or (b) negligent entrustment.
To be exposed to employer liability, known as "respondiat superior",
you don't have to be paying him anything, or have any formal
boss-worker relationship; it just means, if he is doing an errand
_for_you_ when he crashes, you can be held responsible. And that has
nothing to do with who owns the car; if your son, driving his own car,
goes to the dry cleaners to pick up _your_ suit, and crashes into
someone, that someone can sue _you_ and you would be (vicariously)
responsible for your son's negligence.
Negligent entrustment also does not require that you own the car that
you entrusted to him. The gist of that caase of action is providing a
dangerous tool to someone you know, or should have known, was
incapable of using it safely. Obviously, that's a jury question with
fuzzy borders, but if your son has a good driver record at the time of
the transfer of ownership, you have little to worry about. OTOH, if
he were a wild one behind the wheel, with lots of wrecks, tickets, a
drinking and/or drug problem, and a general bad attitude, and you gave
him the keys to a car, it wouldn't matter if you had gifted the title
to him, or just let him borrow a family car for the evening, you could
still be held responsible for negligently entrusting the car to him.
I
would think that by lessening *my* exposure, it would also reduce the
cost of my umbrella and I should be able to insure him for lesser
liability limits than I carry, but I haven't been able to get a clear
answer on any of that from State Farm. They said they did believe
that *we* would still be entitled to the various renewal credits and
multiline discounts, etc, but insurance costs aside, my first priority
is just insulating myself from any claims that may arise out of his
driving "his" car in the future.
Don't you also want to protect your son against liability exposure?
The liability-coverage component of your overall insurance premium
bill is probably relatively small, esp. compared to the collision
coverage on a late model car; also, the more liability coverage you
carry, the less (per dollar of coverage) it costs you -- the premium
is not directly proportional to the coverage. So, for a
proportionately small premium increase, you get a larger boost in
coverage. Don't shortchange your son. Another way this could hurt
him is in the area of Uninsured Motorist coverage, which is usually
written in the same amounts as the liability coverage. You want your
son to have enough UM coverage to pay for _his_ injuries in the event
he gets hit by an uninsured motorist. The state-mandated minimum
limits in virtually all USA states are far below what you _really_
need to be well protected. 100k per person, 300k per crash, 50k
property damage is probably a bare minimum to be close to adequate
these days, and more would be better.
Does anyone have any insights as to whether this is a viable plan or
if I may be overlooking areas of concern?
One other, unrelated concern is that by gifting the car to your son,
you may incur some tax consequences, depending on the value of the car
this may or may not be a concern. Just be sure to also clear that
with your tax advisor before you complete the transaction.
--
This posting is for discussion purposes, not professional advice.
Anything you post on this Newsgroup is public information.
I am not your lawyer, and you are not my client in any specific legal
matter.
For confidential professional advice, consult a lawyer in a private
communication.
Mike Jacobs
LAW OFFICE OF W. MICHAEL JACOBS
10440 Little Patuxent Pkwy #300
Columbia, MD 21044
(tel) 410-740-5685 (fax) 410-740-4300
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