It can be difficult for teenagers to pay for their own car insurance, even if they have a job.
That’s why many parents choose to put their teens on their car insurance policy. Eventually, however, teens become adults and parents wonder if they should continue to carry them on their own policy.
If you’re unsure of whether your adult son or daughter should remain on your auto insurance policy or whether getting their own policy is required, here are some things to consider.
How long can a child stay on a parent’s auto insurance policy?
As long as your son or daughter is still living with you, 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.
When to keep your adult child on your auto insurance policy
There are some instances where it may make sense to keep your adult child on your auto insurance policy. If your child still lives at home and is financially dependent on you, you may want to keep them on it. Keeping your child on your policy also makes sense if they’re away at college but continue to list your address as their primary address.
“If your adult son or daughter resides in your household or has regular access to your vehicle then you should keep them on your car insurance policy,” says Jenny Saint Preux, personal insurance agent at HN Insurance. “In fact, if they are a member of your household and do not possess their own separate automobile policy, lots of carriers will require that you add them onto the policy, as they would be considered a risk or unlisted operator.”
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 drivers license. After receiving risk alert reports, carriers usually reach out to policyholders and request one of the following:
- The unlisted operator be added onto 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.
Benefits of adding your adult child to your auto insurance policy
“It’s generally less expensive per vehicle to have more than one person on an auto policy. The same goes for having more than one operator to one vehicle. That being said, there is a cost benefit to adding your adult son or daughter and their vehicle onto your policy,” explains Saint Preux.
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. This is something to be aware of when attempting to add your child’s vehicle onto your policy.
When your adult child should get his or her own auto insurance policy
If your adult son or daughter no longer lives with you, they should get a separate policy, regardless of their age. Here are some other factors that indicate it’s 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.
- They are financially independent.
How to help your adult child find a good deal on auto insurance
In the event you decide your child needs to get their own auto policy, you can help out by educating them on how to land a great deal. 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 defensive driving course, maintain a clean driving record, bundle their home insurance with their auto insurance or don’t put many miles on their car because they work from home or often stay in their neighborhood.
The bottom line
Whether you should put your adult child on your car insurance policy depends on your particular situation. In some cases, adding them to your policy can benefit both you and your child. Other times, however, doing so is simply not permitted and you need to encourage your child to obtain their own policy.