Your children probably will need to get an auto policy in their name if a vehicle is titled in their name. You always want the owner as the named insured so that insurable interest is certain when a claim is made for damage to the vehicle. If the insurer puts the child’s vehicle on the parent’s policy without knowledge of the true owner, there might be complications in settling a claim. In an ideal world, all vehicles in the household will be titled and insured under the same name, regardless of who is the principal household operator. Coverages will be consistent, and—in most cases—premiums will be the lowest.
However, if your children’s vehicle is titled in their name and they insure the vehicle on their own, you will want them to purchase the same liability limits that you have, so that there are no gaps in protection for all residents in the home. You will have your policy’s limits available when you drive your child’s vehicle or maintain it (e.g., when you repair the brakes), but siblings will have only the limits on your child’s policy. While there are legal theories outside of driving and maintaining the children’s vehicles that could make you liable, a New Jersey policy should provide coverage for them. Additional gaps, though, could manifest themselves if your policy is not a standardized auto policy, but rather an insurer’s independent policy form.
We recommend that you become informed by our agency before you title a vehicle to your children. There may be a good reason to do it, but there can be unexpected consequences. Give us a call today to learn more about your child’s auto policy.