Car insurance rates can be staggering, particularly for teenage drivers. Because car insurance providers consider teenagers to be riskier drivers, teens face some of the highest auto insurance premiums of all. A recent analysis of major car insurance providers found that teenage drivers average paying between $1,900 and $5,300 per year for car insurance.
Even if a teenager is currently employed, the high insurance costs may make it extremely difficult for them to pay for their own car insurance.
That’s why many parents choose to add their teens to their car insurance policy. However, as teens reach adulthood, there may be times when it is appropriate to remove your adult child from your policy.
If you’re unsure of whether your teenager or young adult son or daughter should remain on your auto insurance policy or whether getting their own policy is required, here are a few factors 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 add your teenager to your car insurance policy
There are some instances where it may make sense to add your teenage child to your auto insurance policy. If your teenager 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 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.
Benefits of adding a teen driver to your car 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.
Costs of adding a teen driver to your car insurance
Across the United States, parents average seeing their car insurance premium increase by 80% per year when they add a teenage driver to their policy. In fact, five states see the average premium double with the addition of a teen on a parent’s insurance policy.
CBS reports that adding your high school child to your car insurance can increase your annual premium by as much as $3,500. Because costs are so high, consider instances where it is more beneficial to not include your teenager on your car insurance policy.
If you’re considering adding a teenage driver to your policy, shop around for the best cheap car insurance companies.
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 best cheap car insurance companies for parents with teen drivers
- Geico: Geico features the lowest average increase for parents in California who added a teenage driver to their annual policy in 2018. While male and female teen drivers faced similar car insurance amounts, the overall average increase to a parent policy is $1,695. Geico offers a few suggestions for teen drivers to help cut costs, including qualifying for the good student discount, taking a driver training course and driving an older, more conventional vehicle.
- State Farm: Parent policies with State Farm average insurance premium increases of $1,928 when a teenage driver is added. It’s important to note that there is a huge difference between female teenage drivers and male teenage drivers when it comes to State Farm’s average insurance prices. For example, adding a female teenage driver only increases parent policies by an average of $1,394, while adding a male teenager increases the policy by an average of $2,462. State Farm offers teen discounts like good student discount, good driver discount and away at college discount.
- Nationwide: Nationwide averages quite a bit higher when it comes to adding teenage drivers to parent policies. For example, in California, parents can expect an average $2,857 increase when putting a teenager on their current insurance policy. However, Nationwide does extend two potential programs to help cut costs for young drivers: good student discount and accident forgiveness.
- Progressive: Even higher than the others, Progressive averages adding on $3,478 when teenage children are added to parent insurance policies. Despite this staggering increase, the insurance provider does offer a few options for discounts. For example, they too provide good student discounts to those who maintain good grades.
- Allstate: If you’re a parent with an Allstate policy and you’re considering adding a teenage driver to your insurance plan, get ready for a hefty increase. Parents average paying an additional $3,558 just for adding a child onto their policy with Allstate. Look for savings for young drivers with good student discount, or have your teen become teenSMART certified. This program provides teenage drivers with immediate feedback to help prevent accidents. You’ll also receive a discount if your child uses their car at a school more than 100 miles away from 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.
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.