Car Insurance Limits for 21-Year Old
Car Insurance Limits for 21-Year Old
My son has moved into a house with some friends and is now paying all his own expenses. He has been on our car insurance up to now. I'm planning to wait a few months to make sure this house rental deal seems to be working out, but then I reckon it's time that he get his own car insurance. What should I advise him in terms of the insurance limits to get? Should he get more than the state-required minimum limits? He currently has essentially zero assets, other than his future lifetime earnings. He owns a 2012 Nissan Altima. We currently don't carry comprehensive insurance for it.
A 10-20% allocation to gold has helped with the sequence of returns problem. Some gold held physically is also good insurance against the all-digital-assets problem.
Re: Car Insurance Limits for 21-Year Old
It really depends on what he has to protect. If he has nothing in the bank, then modest numbers are fine. If he's already got $100,000 in the bank (you said he doesn't) or making over $100K/yr, I'd go higher. The state minimums are typically way too low, so don't go by that. At least $100K for all the major categories and don't forget uninsured/underinsured to protect against all the people who are diving with no insurance or are at the state minimums and underinsured.
Re: Car Insurance Limits for 21-Year Old
Not part of the OP question but don't forget about renter's insurance. It may be required by the terms of the lease. Even if it's not, the house mates want to make sure there is coverage in case of damage to the property or an accident. If auto and premises insurance is with the same carrier, there may be a discount.
Disclaimer: nothing written here should be taken as legal advice, but I did stay at a Holiday Inn Express last night.
Re: Car Insurance Limits for 21-Year Old
Don't get the minimum - regardless of assets. Get enough liability where he's protected and if he causes an accident his insurance will actually be helpful to the person he harmed. In other words, don't be underinsured. I told my 23 year old son to get at least 100/300.
Re: Car Insurance Limits for 21-Year Old
I went through this issue several months ago for my older son.
We went with liability only:
$100K property
$250K/$500K bodily injury
We then added $1M in umbrella coverage.
He also has renters' insurance.
His total monthly bill for all coverages is just under $70.
My thinking was:
1. Liability insurance not only protects the insured but also the injured.
2. Filing for bankruptcy is not good at any age/asset level.
3. If the car is a former family car then there is a risk of parent liability (the rules vary greatly state to state).
To me it was an easy decision.
We went with liability only:
$100K property
$250K/$500K bodily injury
We then added $1M in umbrella coverage.
He also has renters' insurance.
His total monthly bill for all coverages is just under $70.
My thinking was:
1. Liability insurance not only protects the insured but also the injured.
2. Filing for bankruptcy is not good at any age/asset level.
3. If the car is a former family car then there is a risk of parent liability (the rules vary greatly state to state).
To me it was an easy decision.
Re: Car Insurance Limits for 21-Year Old
I use a multiplier of my current salary plus my current assert to determine how much insurance to get.
Re: Car Insurance Limits for 21-Year Old
This sounds like it could be helpful. Could you give us a few more details on the multiplier formula that you use? Thank you. And thanks to everyone else for their replies, which are very helpful.
A 10-20% allocation to gold has helped with the sequence of returns problem. Some gold held physically is also good insurance against the all-digital-assets problem.