Should you add your teenager to your car insurance policy?

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Do I have to add my teenager to my car insurance? If you’re the parent of a teen driver who recently got their license, you’re probably thinking about this. Because car insurance for teen drivers can be so expensive, many parents choose to add their child to their existing policy. However, this too has its drawbacks as the average premium increase for adding a 16 year old is 130% (and if your teenager is male, you may even have to add another 30%).

Your child probably won’t stay on your policy forever. As they get older and move out on their own, it might make sense to remove them from your policy. If you’re 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 teenager to my car insurance?

No, you don’t have to add your teen driver to your car insurance policy. Young drivers are able to purchase their own car insurance policy, but they’ll likely pay an enormous premium. This is because insurance providers consider teenagers to be the riskiest drivers of all, meaning that teenage drivers tend to average paying between $1,900 and $5,300 per year for car insurance (the national average premium for male drivers is currently $4,048, whereas for females it’s $3,819).

And while there are both pros and cons to adding your teen driver to your insurance policy, it’s ultimately a personal decision. If you live in a state where car insurance premiums are already high, it might be an obvious choice to add them. But if you live in a state where car insurance is cheaper, your teen driver might be able to afford their own policy.

Benefits of adding a teen driver to your car insurance policy

The biggest benefit of adding a teen driver to your policy is that it could save you money. Typically, the more drivers you have on your policy, the lower your premium is.

“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.

Additionally, 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.

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Costs of adding a teen driver to your car insurance

Adding a teen driver to your car insurance policy will likely increase your rate. In fact, data shows that adding a teen to your policy raises your premium by an average of 130%. That’s an average of over $4,000 a year. However, these increases can vary greatly by state. For example, in Vermont you can expect a premium increase of 216%, whereas in Hawaii the increase is 4%.

If you live in a state where car insurance is expensive to begin with, it’s a good idea to weigh the pros and cons of adding a teen driver to your policy. Talk to your insurance company about what it would cost, and if there are any discounts that you can take advantage of.

Additionally, consider shopping around for a cheaper insurance provider. If you’re able to find a lower premium, adding a teen driver to your policy won’t increase your rate quite as much.

When do you add your teenager to your car insurance

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

And if you’re planning to add your child to your car insurance policy, you might also be wondering when is the right time to do it. You should add your child to your policy as soon as they get their driver’s license.

When your child has a learners permit and is practicing driving with an adult in the car, they’re automatically 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?

Technically, a child can stay on their parent’s car insurance policy forever. 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 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 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.

But if none of the above factors are in play yet, you should consider keeping your teen 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

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.

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 don’t 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, they can remain on your insurance policy indefinitely. However, once your child moves out, they should get a separate, individual car insurance policy.

Does my teenager need insurance to drive the family car?

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

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

Yes, even if your teenager holds the title and ownership of their own car, they can still remain on your car insurance policy. In fact, there is more of a reason to put them on your policy if this is the case.

Can I list myself as the primary driver of my teen’s car?

If your teenager drives an expensive or newer model car, it is probably better to list you or your spouse as the primary driver. However, if you have an older, less valuable car, your insurance premium could go down if you designate your teenager as the primary driver.

Can I drop my child from my car insurance?

It’s likely. But before you do so, make sure they have their own policy lined up. To avoid a lapse in coverage, their new policy’s start date should overlap a few days with when their old coverage ends.

The bottom line

Whether you should put your teenager 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.

“So be sure to discuss the upsides and downsides of your teen 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.