Adding your child to your car insurance

Do I have to add my teenager to my car insurance? If you are the parent of a teen driver who recently got their license, you are probably thinking about this. Because car insurance for teen drivers can be so expensive, many parents worry about adding their child to their existing policy. You may be faced with a sizable premium increase after adding your teenager or young adult driver to your policy.

As your child gets older, it might be time to remove them from your policy. If you are debating whether your adult son or daughter should stay on your policy or purchase their own car insurance policy, there are factors to consider.

Do I have to add my child to my car insurance?

When your child is a minor, they cannot get their own insurance policy. If your child lives in the household and is driving a vehicle you own, they will have to remain on your policy regardless of their age, but it is also beneficial financially in many cases because of discounts you may be eligible for. When your child lives on their own, they may be able to stay on your policy or need to get their own policy, depending on your state and insurance provider’s criteria.

While some people worry about the rising costs of having a young driver on their policy, the price increase is for a reason. Drivers aged 16 to 24 are more likely to be in a fatal car accident, skip the seatbelt and get behind the wheel after using substances, so insurance companies account for this risk with higher rates. However, as drivers get older, premiums tend to decrease.

Long story short: you will have to add your teenager to your policy for them to drive when they are licensed, and you will generally save your young adult driver a sizable chunk of money by adding your young driver to your policy rather than asking them to get their own if they still live in your household. Also, as long as your teen or young adult is driving a car that you own, they will need to be included on your policy.

Benefits of adding a teen or young adult driver to your car insurance policy

You may not have a choice of adding your child, but there are benefits in that your young adult child will not be paying the higher prices for young drivers on their own policies. Plus, you may qualify for discounts your new driver cannot, like savings for bundling, loyalty or having multiple vehicles on your policy.

Even if your teenager or young adult must be insured on your policy, you may consider asking them to pay you for their portion of insurance coverage. It may still be a hefty amount, but it will likely be a much less burdensome amount than a premium for a policy they buy on their own.

Additionally, your young driver might be able to help mitigate some of the rate increases you will see after adding them. Many car insurance companies offer discounts for students who practice safe driving and get good grades in school. If your child qualifies, you could save even more money on your car insurance rate.

If your young driver plans to get their own car and you want to add them to your policy, you may need to add yourself to the title and registration. Some auto insurance companies will allow you to add an additional vehicle not registered or titled in the name of the policyholder onto the policy. Most of them, however, will only allow vehicles titled in the name of the policyholder to be added.

Costs of adding a young driver to your car insurance

Adding a teen driver to your car insurance policy will likely increase your rate. In a recent study on cheap car insurance for teens, we looked at average rates for teen drivers. When drivers were added to their parents’ policy, their portion of the premium ran somewhere around $1,200 to $1,900 annually for full coverage insurance from even the cheapest companies. We also found that 16-year-old drivers added to their parents’ coverage averaged around $2,500 annually in premium increases for full coverage insurance. Drivers who are 18 with their own policies pay an average full coverage premium of $5,335. When you compare that against the average cost for full coverage auto insurance — $1,674 per year — you see that younger drivers generally pay significantly higher rates.

The good news is that young drivers generally get cheaper to insure with each year of driving experience (assuming they keep their driving record clean). The initial cost to add your teen or young adult might feel staggering, but it will usually get better with time.

If you live in a state where car insurance is expensive to begin with, talk to your insurance company about what it would cost to add your young driver and if there are any discounts that you can use. You can also get some quotes to give you an idea of what to expect when you are ready to add your child to the policy, but remember you will need to get new quotes for more specific numbers when the time comes.

Additionally, consider shopping around for a cheaper insurance provider. If you are able to find a lower premium, the cost of adding a young driver may not seem as significant.

When do you add your teenager or young adult to your car insurance

You are probably wondering: is my child covered under my car insurance?

If you are planning to add your child to your car insurance policy, you might also be wondering about the right time to do it. Generally, you will add your child to your policy as soon as they get their driver’s license, but you may want to contact your insurance provider before your son or daughter gets their permit to get information about how to properly insure your new driver.

Usually, when your child has a learners permit and is practicing driving with an adult in the car, they are covered by your insurance. However, as soon as they have a license and regular access to a car, they need to be listed on your policy.

Some states, such as Florida, provide insurance carriers with “risk alert” reports. These reports advise them of any licensed operators that possess the insured’s address on their driver’s license. After receiving risk alert reports, carriers usually reach out to policyholders and request one of the following:

  • The unlisted operator be added to the policy.
  • Proof that the unlisted operator is insured elsewhere.
  • Proof that the unlisted operator resides elsewhere.

Official documents such as a utility bill, rental agreement or deed are typically the types of official documents accepted to show proof of residence. Failure to prove that the unlisted operator is insured elsewhere or they reside elsewhere requires that they be added onto the policy. In addition, failure to provide the appropriate information to allow the unlisted operator to be added onto the policy could lead to midterm cancellation or non-renewal of the auto policy.

How long can a child stay on a parent’s auto insurance policy?

There is not a required age for when your child has to get their own policy. As long as your son or daughter is still living with you and you have ownership in the vehicle they drive, there is no certain age at which you must remove them from your car insurance policy. This is often a surprise to parents as other types of insurance policies have cutoff ages. For example, children can only stay on their parent’s health insurance until they turn 26.

How long a child can stay on a parent’s policy depends on the specific circumstances. If your child owns their own home or apartment, many insurance companies will consider your child to be financially independent and require them to get their own policy rather than being on yours. Married children are also often, but not always, considered financially independent. If your student is away at school, check with your insurance provider to see what their policies are because some have unique criteria for insuring students.

If you have questions about what circumstances will allow your child to stay on your policy, discuss them with an insurance agent to get specific information for your situation.

When should your adult son or daughter get their own auto insurance policy?

“Insurance is a contract, which means you must be an adult to obtain it,” says Laura Adams, an insurance expert. However, if your adult son or daughter no longer lives with you, they may have to get a separate policy, regardless of their age, unless they are qualifying for the distant student discount available with some providers.

Here are some other factors that indicate it is time for your child to get their own policy:

  • They are married or have children of their own.
  • They are the sole owner of the vehicle they drive and do not live in your household.
  • They are financially independent.

If none of the above factors are in play yet, many insurance experts recommend keeping your teen or young adult on your policy. Laura Adams adds:

“The problem is, the cost of insurance owned by a teen driver is typically higher than if a teen gets added to a family policy. That’s because young drivers are deemed risky by insurers, and they don’t have as many opportunities to save as older drivers do. For instance, teens have a limited credit history, a short driving history and don’t qualify for typical discounts, such as loyalty, bundling and insuring multiple vehicles.”

How to help your adult son or daughter find a good deal on auto insurance

If your young adult child needs to get their own auto policy, you can help out by educating them on insurance and how to find a policy that meets their needs. Encourage them to shop around and ask their friends and relatives for suggestions on reputable auto insurance providers with a history of good customer service and claims processing.

In addition, let them know that they may be eligible for car insurance discounts if they take a driver training course, maintain a clean driving record, bundle their home (or renters) insurance with their auto insurance or do not put many miles on their car because they work from home or often stay in their neighborhood. However, these discounts may not be available to everyone, so check with the insurance providers they are considering to see what they offer.

Another popular discount is for good students. This discount is normally available for students up to the age of 24 years old. If they go away to college and do not take their car with them, they might also qualify for a lower rate while their car is sitting at home.

Frequently asked questions

When should my child get his or her own car insurance policy?

As long as your child lives at your address and you have ownership in the vehicle they drive, they may be able to remain on your insurance policy indefinitely. However, once your child moves out and is financially independent, they may have to have a separate, individual car insurance policy. Every carrier has its own regulations. If you are unsure when your child needs to get their own policy, talking to your insurance agent could lend some clarity to the situation.

Does my teenager or young adult need insurance to drive the family car?

Once your teenager or young adult is licensed to drive, he or she must be covered by an insurance policy to operate a vehicle.

If my teenager or young adult owns their own car, can they stay on our insurance policy?

It depends. If your young driver holds the title and ownership of their own car, they may be able to still remain on your car insurance policy. However, to insure a vehicle, you must have financial interest in it. This means that your name may need to be on the title or registration of the vehicle along with your child to be insured on your policy. If the vehicle is just in your child’s name, your insurance company may request that your child be listed as a named insured on your policy, meaning that your child will have equal policy rights to you, or they may be required to get their own policy. Talk to your insurance company to understand how to proceed.

Can I drop my child from my car insurance?

At some point, it is likely that you can remove your child from your policy. But before you do so, make sure they have their own policy. To avoid a lapse in coverage, their new policy’s start date should coincide with when their old coverage ends.

The bottom line

Whether you should put your child on your car insurance policy depends on your situation. In some cases, it may be required or adding them to your policy can benefit both you and your child. Other times, however, doing so is simply not permitted (like when they no longer live at home but are not qualified as a distance student) and you need to encourage your child to obtain their own policy.

“Be sure to discuss the upsides and downsides of your child getting their own policy with your insurer. And take advantage of available discounts — such as being a safe driver, getting good grades and completing a driver education course — to help reduce a young driver’s insurance cost as much as possible,” adds insurance expert Laura Adams.

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