Often, when talking to friends about finances or cars or cellphone bills or something along those lines, friends will note that their parents cover their cellphone or auto insurance bills - whether they're simply remaining on their family's plan or whatever. While cellphones are less problematic, I've always thought that auto insurance could be - especially if the person moves out of state, it may even be illegal.
But even assuming that most people are doing it legally, it seemed widespread enough that on the question about how much auto insurance costs a person, one of the options is "Someone else covers my insurance." In total, 14.2% of respondents have their insurance covered by someone else, but obviously it's more important to focus on those in the younger crowd... and the numbers are really surprising. While I expected a sizable portion to answer that it's covered, I didn't expect 47% of the people between 18 and 24 years old who have cars to say that someone else covers the insurance. Even if we factor in singles vs. marrieds (and say that singles, especially if they're close to home, will likely stay on their parents' insurance), 39% of marrieds and 63% of singles have their insurance paid for.
Interestingly, all singles between 25-29 who have a car pay for their own insurance, while 81% of marrieds do - so the trend is not long-lasting. But for almost 2/5, then still almost 1/5 to have their insurance paid for while they're in their twenties is a pretty nice savings for the couple - while quite a drain on their parents' finances.
This is really interesting. I'm looking forward to the transcript of your talk.
ReplyDeleteThanks. :) I think so too...
ReplyDeleteI don't know if we'll have a transcript per se, but I'm writing it all up in advance (most of the way done), and it might be recorded and/or videoed, we'll see how feasible that will be. It should be interesting, fun, and enlightening.
Interesting figures on the insurance. They raise a different question with me. Who bought the cars that are being insured by the parents? If the parents bought the car for a single in the 18-25 range and then that person takes it into the marriage, then the couple both didn't pay for the car and aren't paying for the insurance. Might also explain how the insurance is on the parents' policy, if the parents still maintain ownership of the car and it is only being "loaned" to the kids.
ReplyDeleteProfK - I assume it's the parents' car, and that they retain title and work the insurance that way. Hence the questionable legality in some cases, especially if across state lines. But not necessarily a problem.
ReplyDeleteGee, I guess I'll have to call my parents and tell them to add another one to the list of the "Things you did wrong when you were raising me". When I first got my own car, I had to pay for my own insurance, and my own gas as well.
ReplyDelete[Does that sound bitter? I didn't mean for it to.}
Lots of neighbors in my NJ location drive around with NY plates. When we moved from NY to NJ, we knew we had 60 days to obtain NJ insurance. I let my car go a few weeks over the limit, but my husband almost literally pushed me out the door to go register my car in NJ, because the NY insurer could deny any claim if they proved we resided in NJ. That knowledge motivated me. My neighbors driving with NY plates don't care, because the car is probably registered to a family member who lives in NY.
ReplyDeleteBaila - I didn't get my first car until I was married 3 years, I think. :) And yes, I paid for it all myself.
ReplyDeleteTesyaa - Exactly what I mean.
If you looked into the out of state question, I wonder if you could clarify something for me. Someone in my neighborhood did not take on a NY license until recently because he believed that Florida license would bring him lower auto insurance rates. I don't get how the scheme would work, though, as his car was registered in NY. He was forced to give up his Florida license when he got summoned to jury duty in the sunshine state and could not just hop on a plane to show up. He also has been summoned to jury duty in NY without holding the NY license. BTW his Florida license must have shown his mother's Miami condo as his residence.
ReplyDeleteI haven't really looked into it closely in terms of law. But my guess is that if he had an accident in NY under FL insurance with a FL license, if they found out he was living in NY, he'd have been in major trouble/insurance would reject the claim if they investigated it.
ReplyDeleteAfter the multi car discount and factoring in the fact that some are covered for liability only this could be a total of <$300/year. Not that I think parents need to do this for their kids but it's really nice of them and compare it to most other expenses in life not a very big one.
ReplyDeleteJerk - I don't disagree; I just mean that it's interesting that it's done. And again, it also runs the risk of getting people into trouble in some situations.
ReplyDeletethanks for useful info.
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Umm...This's interesting.
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