If you own the car but do not drive it are you liable for accidents?

Answer 1

Your situation could result in a lot of quirky scenarios, so you're being very smart to ask these questions before proceeding.

You've got several options, probably more than I can hit on here. But I'll try:

1. If you plan on keeping your name on the title, and your ex-husband agrees to insure your daughter and the new car, you can ask his carrier to put you on as a lienholder for the car. Usually, this is a simple process, because the insurance carrier will ask if any lienholders exist for the car, but it might take your husband's permission. Also, if there's an actual lien (ie, through a bank or a dealership), the lienholder would need to be placed on the policy, anyway (but there's nothing wrong with listing the bank and you at the same time). This doesn't mean that you have any rights under your husband's policy except the right to be considered for payment (in other words, as a lienholder, you're not an insured driver under his policy...just in case he wonders :).

2. HOWEVER: Your husband's carrier might have issues with listing a new vehicle for which he is not an owner. If that's the case, along with including the new car on your husband's policy, you'll need to have your daughter listed on the title AND the policy. This way, she will be both an owner and an insured under the policy. If you don't do this, and your daughter has an accident, your husband's carrier might deny coverage because the new car would be considered an unlisted vehicle owned by a family member, and they would rightly deny because the appropriate rates weren't paid for that vehicle.

3. Would the money go just to your husband? Not necessarily. Again, if you're listed as a lienholder, you would need to be included on the draft. If his carrier neglected to include you, and your husband ran off with the money, you'd have recourse against his carrier and they might have to pay you again (this is rare, and it can be a battle, but I've seen it happen).

4. As an owner of the new car, would you be liable for any accidents? It depends. If your daughter has coverage under her father's policy, and the vehicle is listed on that policy, your husband's carrier would be primary and do whatever it can to "protect" its insureds (ie, your husband and your daughter). It's highly unlikely any damages would come your way, though it's possible depending on the severity of an accident. Say, for instance, your daughter broadsides a vanload of kids, and there are fatalities involved. Your husband's policy limits would likely be exhausted in such a scenario. But, your husband's carrier will also attempt to settle any claims within those policy limits, and obtain releases for further damages. This is a worst-case scenario, of course, but those things do happen. On the other hand, if your daughter's coverage and car are all "legal," on the "up-and-up," etc, you should be okay.

5. Shop around. It's possible that adding your daughter to your husband's policy isn't the best way to go, as far as rates go. Your daughter might get better rates just getting a policy on her own (though this is highly unlikely). Also, you can always have the exclusion on your policy removed, and include your daughter and the new car. HOWEVER: Since your daughter's permanent residence is with her dad, you'd need to check with your carrier to verify this is okay. Some insurance carriers are very, very picky about that sort of thing.

Hope that answers some of your questions. In reality, your situation is not that unusual these days, but you're on the right track in making sure all your bases are covered.