Patti Wright said:
My sister, age 42, has co-signed on a loan for a truck with my son, age 19. He lived with her for a year while I had to move to Virginia for my job. He now lives with me in Virginia - she still lives in California. At the time they purchased the truck together, she took out an insurance policy with both of their names on it. She told me she did this because it was cheaper. The insurance policy expired right after he moved to Virginia so he located a new insurance company, asked for a quote and was given one far below what he had been paying (he has made all insurance and bank loan payments - she has paid nothing). He purchased the policy and I let her know that he now had a policy in his name only. She bacame angry and told me that should he get into an accident, that she could be sued, so she therfore either needed to be on his policy or would take out her own. She then said this seperate policy was going to cost her $300 and we would have to pay. Does the law require both co-signers to have insurance when one of the co-signers never drives the car?
My response:
Sister (we'll call her Sally) has a legitimate concern. While there is no law requiring son (we'll call him John) to obtain a policy with Sally's name on it, she could be held liable as a co-owner.
Before Sally agreed to sign, Sally and John should have signed their own agreement requiring John to maintain insurance with hers and his name on the policy. But, apparently, they didn't.
Now, here's the fix.
Since Sally has a legitimate concern, and since she failed to protect herself via contract with John, it would be fair for Sally to pay to John for the extra premium to have her name added to the policy. Sally is entitled to all copies concerning the insurance policy and declaration sheet.
However, Sally won't care whether she failed to enter into a contract with John. All Sally feels is that she's been tricked. Therefore, understand, that if you force Sally into paying for the protection, she's not going to feel very good about either of you - - despite the fact that John is an adult. She'll feel that you are still responsible to make John do something because you're his mother. Illogical as that may be, this is what Sally is feeling.
From a "family" point of view, is it fair for John to place his aunt Sally in financial danger?
Do the right thing. Protect Aunt Sally. After all, if it wasn't for her signature, John would be walking.
IAAL
