Young drivers can be expensive to insure, but adding your teen to your policy is critical to keeping your coverage up to date. Failing to add a driver to your auto insurance could result in denied claims and out-of-pocket expenses and might even constitute insurance fraud. Bankrate’s insurance editorial team researched the ins and outs of adding your child to your car insurance policy, as well as when your child can be removed from your policy.
- 16-year-old drivers add between $1,200 and $2,400 to their parents’ policy annually.
- You typically can wait until a driver is licensed to add them to your policy, but some companies may want drivers added with learner’s permits.
- You may be able to insure your child on your policy until they move out, buy their own vehicle or become financially independent.
Do I have to add my child to my car insurance?
If your child has a driver’s license and lives in your household, they likely need to be listed as a driver on your policy. When your child is a minor, they can’t 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.
Benefits of adding your child to your car insurance policy
Although you will probably see a premium increase when you add your child to your policy, there are benefits as well. Some common advantages to adding your child as a driver on your auto insurance policy are:
- Lower premiums for your child: If your teen is 18 or older, they could purchase a policy in their name (assuming they own, lease or finance their own car). However, car insurance for 18-year-olds on their own is generally pretty expensive. If your teen lives with you and if your name is also on their vehicle, they’ll likely save money by staying on your policy.
- Qualifying for new discounts: There are plenty of car insurance discounts available for teen drivers. You might be able to offset some of the cost of adding your teen driver by taking advantage of good student discounts, distant student discounts and teen driving programs.
- Simplified policy management: Having your entire household on one policy could make it easier for you to make changes, pay bills and keep track of your insurance documents.
- Gaining coverage for your teen: Adding your teen driver helps to provide coverage if an accident occurs. If your child is not listed as a driver on your policy but still drives one of your vehicles regularly, coverage could be denied after an accident.
Additionally, adding your teen to your car insurance policy could present a learning opportunity. You could teach your child about car insurance, explain why it is an important purchase and teach them how to pay bills.
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 16-year-old drivers were added to their parents’ policy, their portion of the premium ran somewhere around $1,200 to $2,400 annually for full coverage insurance even from the cheapest car insurance companies. 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. Getting quotes from multiple car insurance companies when you add your teen driver could be a good way to find the cheapest coverage for your needs.
When do you add your teenager or young adult to your car insurance?
Generally, you should add your teen or young adult child to your policy as soon as they get their driver’s license. To be safe, though, you may want to contact your insurance provider before your child starts driving. Some companies may require that your child be added when they get their learner’s permit rather than their license.
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:
- That 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.
When should your adult son or daughter get their own auto insurance policy?
There is not a required age for when your child has to get their own policy. As long as they are still living with you and you have insurable interest in the vehicle they drive, there is no certain age at which you must remove them from your car insurance policy. However, if your adult child no longer lives with you, they may have to get a separate policy, regardless of their age, unless they qualify for the distant student discount available with some providers.
Here are some other factors that might 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, an insurance expert, 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.”
Frequently asked questions
Does my child need to own a car to have insurance?
No. Most younger teens do not own the vehicles they drive and their names may not be on a lease or loan either. If your child is driving a vehicle owned by you or someone else in your household, they still need to be added as a driver to your policy.
What information do I need to add my child to my policy?
You’ll likely need your child’s name, date of birth and driver’s license number. You may also need their Social Security number. If your child qualifies for a good student or distant student discount, you may need proof of their grades (like a recent grade card) or proof of the school they attend without a car (like an admissions letter with the school name on it).
How can I save money on car insurance for teens?
Adding a teen to your policy presents a good opportunity to shop your coverage with different car insurance carriers. You might find that the company that was cheapest for you before adding your teen is no longer the cheapest option. Taking advantage of discounts is another solid strategy to save money, as is educating your child about safe driving habits so they maintain a clean driving record.