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Edited by Jackie Cohen
Last Updated June 15, 2022
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Getting your driver’s license as a teenager is a rite of passage. You’re now able to go wherever you need to without relying on your parents. While you might not depend on your parents for rides anymore, you may want to stay on their car insurance. Doing so can be much cheaper than investing in your own policy.
If you do decide to purchase a separate car insurance plan, Insurify can help. Once you answer a few questions, you’ll receive personalized auto insurance quotes in minutes. With Insurify, it’s fast and easy to find the best car insurance for your unique situation. Compare the cheapest car insurance rates today.
- There’s no age limit for remaining on your parents’ auto insurance policy.
- If you’re under 25, you can save money by joining your parents’ car insurance policy.
- Once you move away from home, get married, or consider yourself financially independent, you may want to take the plunge and invest in your own car insurance.
Save Money by Staying on Your Parents’ Car Insurance Policy
While it may be tempting to be independent and purchase your own car insurance policy, it’s far more affordable to remain on your parents’ plan. This is because auto insurance rates are based on risk. Car insurance providers believe that if you’re a young driver with less experience behind the wheel, you’re more likely to cause accidents and cause more claims.
To mitigate their risk, auto insurance companies charge higher premiums for young drivers who purchase their own policies. Even though this might seem unfair, crash statistics and other data give these providers reason to believe that teen drivers and young adults are riskier. In fact, the Insurance Institute for Highway Safety found that compared to all other age groups, teens between 16-years-old and 19-years-old are involved in the highest ratio of fatal car crashes.
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Rules for Staying on Your Parents’ Car Insurance
How long can I stay on my parents’ car insurance policy?
There’s no age limit that you get kicked off your parents’ policy, and it may save you money. But if it’s time to move out, you’ll probably need to secure your own coverage.
Unlike health insurance, which requires you to get your own coverage once you turn 26, there are no age limits to how long you can stay on your parents’ car insurance. As long as you live at home or you’re a full-time college student, you may be added to their policy.
In the event you move out permanently and purchase your own vehicle, you’ll need a separate car insurance plan. The only exception to this is if you move because you’re headed to college or you’re traveling for a bit but have plans to return home.
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Benefits of Staying on Your Parents’ Car Insurance
The younger you are, the more you’ll spend on car insurance. On average, you can expect to pay between $3,819 and $4,048 per year as a teen driver. Once you hit age 25, however, your auto insurance premium will go down significantly. Despite this, it will still be more expensive to get your own plan.
When you turn 30, insurance companies will consider you to be much less risky of a driver. As long as you’re still living at home at that time, you can score the lowest rates by remaining on your parents’ auto insurance policy. There are a few reasons it’s cheaper to stay on your parents’ auto insurance.
First off, your parents will balance out your high-risk level as a younger driver. Of course, this won’t be the case if they have a bad driving record full of accidents, speeding tickets, and other traffic violations. Also, insurance providers might offer multiple driver discounts for policyholders who insure multiple drivers through their one policy.
If you’re on your parents’ car insurance plan, they’ll be eligible for this discount.
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Removal from Your Parents’ Car Insurance Policy
While you can stay on your parents’ auto insurance policy, there are some situations that may cause you to get removed from it. If you’re a dangerous driver with a poor driving history, for example, your parents will have to pay higher rates. They might choose to kick you off their plan and encourage you to get your own.
Also, a car insurance company may drop you and take away your insurance coverage completely. Since one accident can raise your car insurance costs by about $80 per month, multiple accidents or traffic violations can cost you and your parents hundreds or even thousands of extra dollars in premiums.
By making it a priority to be a responsible, safe driver, you’ll not only save a lot on your car insurance, but you’ll also convince your parents that they should continue to keep you on the policy. Drivers with a clean record benefit from the lowest car insurance rates.
When You Need to Purchase Your Own Auto Insurance Policy
Sometimes, you may have to purchase a separate car insurance policy as a teen or young driver. If you live in a state that requires the car title and auto insurance to be in the same name, you may be forced to purchase your own car insurance plan. Check your state’s car insurance rules and regulations to see if this applies to you.
Also, if you move somewhere else for a reason other than college, the insurance provider will likely ask that you get your own policy. In addition, if you attend college but don’t live at home with your parents, and the vehicle title is only in your name, you’ll likely need to invest in separate car insurance.
Pros and Cons of Staying on Parents’ Car Insurance
The most noteworthy benefit of staying on your parents’ car insurance is lower auto insurance rates. You’ll also be able to share driving responsibilities with other vehicles at your parents’ house. On the flip side, being on your parents’ policy requires you to continue living with them unless you go to college.
This can be a major drawback if you wish to be independent and move away from them to pursue a job or be with a significant other after high school. Also, any negative remarks on your driving record will cause your rates and your parents’ rates to increase. If you prove to be an irresponsible driver, your parents may choose to drop you from their policy.
How to Save Money While on Your Parents’ Car Insurance
If your parents add you to their auto insurance policy, their rates will increase by a lot. Fortunately, there are some things you can do to reduce the rate hike. First and foremost, maintain a clean driving record free of accidents and violations. Also, make sure you have a safe and affordable vehicle as its make and model can play a role in your car insurance rates. Driving a newer car with the latest safety features can lead to lower rates.
Additionally, search for discounts from major car insurance companies like GEICO, State Farm, and Allstate as well as smaller ones, as they can help bring down your premiums. If you’re a full-time high school or college student, you might land a discount for having good grades
or a certain GPA. You can also qualify for a discount if you complete a defensive driving course or are temporarily away from home for college.
Depending on the car insurance company your parents chose, you might be able to save money by agreeing to use a monitoring app. A monitoring app will track your driving habits and potentially lower your premium if you show a history of safe driving and/or drive less frequently during dangerous times, like rush hour.
What to Do If You Need Your Own Car Insurance
In the event you can’t remain on your parents’ car insurance or decide you want your own policy for any reason, make sure you understand your coverage options and the minimum requirements in your state. Then, shop around and get quotes from at least a few auto insurance companies before you commit to a policy.
Comparing car insurance quotes is the best way to ensure you’ve found the best and cheapest car insurance. Don’t forget to look for discounts and take advantage of any that apply to you. Discounts can save you a great deal of money on your car insurance, especially if you qualify for multiple.
You Can Save Money with Your Parents’ Car Insurance
No matter how old you are, you can remain on your parents’ car insurance as long as you live with them. By staying on their policy, you can save money until you reach your mid-20s and are out of the high-risk years. If you do continue to share car insurance with your parents, do your best to be a safe driver so that your parents don’t get plagued with higher premiums.
Frequently Asked Questions
Once you reach 26, you’ll need to find your own health insurance policy. But unlike health insurance, there is no age limit with car insurance. You can remain as a listed driver on their policy as long as you continue to live in their home.
If your parents are divorced and you live at both of their homes and drive vehicles at each house, each of them should list you as a driver on their policies. This holds true even if you only stay with one of them occasionally. In the event you only live with one parent and use their car, then they should add you to their policy.
Depending on the state you live in, you might be required to purchase your own car insurance if the vehicle title is in your name. If you live in New York or a different state with these laws and an auto insurance provider notices that the title doesn’t match the name on your parents’ policy, they’ll drop your coverage.
Thanks to the “permissive use” policy, you can drive your parents’ vehicle, even if you aren’t listed on their insurance policy. Permissive use states you’ll be covered by their auto insurance in the event of a car accident. Just keep in mind that since there are limits, you might have to use your own car insurance policy to help pay for the costs.
Getting married usually means you no longer depend on your parents financially. Therefore, you’ll likely need to get your own car insurance policy after you tie the knot. While you can technically remain on your parents’ auto insurance if you still live in their home, you’ll miss out on savings opportunities for married couples.
If you move away to go to college, you may be able to remain on your parents’ policy because their address will still be your permanent address. But if you move out for a reason other than college and have a new address, you’ll have to invest in an individual policy. Unfortunately, you won’t be able to use their address to get cheaper rates unless you’re a full-time student.
Most car insurance providers will require you to purchase a different policy if you relocate to another state. The exception is if you attend college out of state and your parents own the car you take with you.
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With the above insights and ranking methods, Insurify is able to offer car insurance shoppers insight into how various insurance providers compare to one another in terms of both cost and quality. Note, actual quotes will vary based on unique attributes including the policyholder’s driver history and their garaging address.