Co-signer for Auto Loan

[simiinsuranceguy]

My insured just co-signed for his 24 year old daughter's auto loan. He does not want to be on her policy as an insured or a driver. Does he not have an exposure as a registered owner if the daughter has an at fault accident and therefore should be covered on the daughter's policy? He feels that his personal auto policy will respond even though the daughter and the vehicle are not on his policy. I have advised that he be on the daughter's policy. Opinions?

[sacman]

Simi,

He absolutely has exposure.
He does NOT have coverage on his personal auto policy, since owned vehicles must be listed on his policy.

There may be a gray area if the daughter resides in the house,maybe, a BIG maybe.

Best way to handle this is to add the father as "additional insured" onto the daughers policy.
There is usually an option for 'additional insured' where you would and the lienholder/additional interest.
The father then has liability coverage without being listed/rated as a named insured/driver.
Shouldn't cost anything to do this.

[ForumReader]

Co-signing a LOAN doesn't mean you are a part owner. You aren't an owner unless your name is on the title. A co-signer is not responsible for operation of the vehicle - they are only responsible for making payments if the primary borrower does not.

[simiinsuranceguy]

I had thought of both of these answers, but just wanted to see what others thought.
The key here is whether or not the co-signer is actually on title. In most cases, they are, and then the need for AI coverage is there. I still think it to be good practice to add the co-signer as an AI to the policy just in case.
Thanks for the replies.

[sacman]

Forum Reader is exactly right, but the origianl question states that the father is a registered owner.

If the father is only a co-BORROWER and not a co-OWNER, then the exposure is GREATLY reduced.
I say greatly instead of completely, because you never know what an, ahem...."agressive" lawyer might attempt to do.
If the father is named in a lawsuit, even as co-borrower, there is no legal representation coverage for him.
Better to be safe than sorry, especially since their is no cost associated with it,usually.

[Miguelito]

This appears to be more of a legal question. I can understand the sensitivity of the coverage issues. However, if the father is linked to the operation, garaging or financing of the daughter's vehicle he is exposed. Particularly if it can be demonstrated that there may be character issues or MVR violations that could lead to vicarious liability.