If you're out of college, on your own and driving your parents' car, you have two main options:
1. Buy the car from your parents."The cleanest solution is to transfer the title to the young adult," Newman says. Whether you buy the car, or your parents give it to you, having your name on the title will enable you to purchase your own insurance policy. Newman recommends this route because:
- It's the least complicated.
- As the policyholder, you can begin building your own insurance track record.
- If your parents are no longer on the car title, they no longer have any liability. Then you're free to purchase the appropriate amount of coverage for your needs, Newman says. Chances are you have fewer financial assets to protect than your folks do.
2. Search for an insurance company that will consider your unique circumstances."It is possible to insure a car you don't own, but you have to search for the few companies that allow it," Gusner says. Most companies, such as Esurance, require you to own the car. Or your parents can search for a company willing to insure the car and list you as the primary driver, even though you don't live with them anymore.
"Some companies will list the young adult as the 'named insured' on the policy with the parents listed as having the financial interest," Newman says. "Some companies will only issue a policy to the legal owner with no exceptions. Other companies will insure the car, list the young adult driver and charge a rate based on the primary driver's [the young adult's] age, driving record, mileage to work, garaging location, etc."