If you’re the parent of a teen driver who recently got their license, you’re probably starting to think about their insurance. Because car insurance for teen drivers can be so expensive, many parents choose to add their child to their own already existing policy.
However, your child probably won’t stay on your policy forever. As they get older, go off to college or move out on their own, it might make sense to remove them from your policy altogether. If you’re debating whether your adult son or daughter should stay on your policy, or purchase their own car insurance policy, there are some factors to consider.
Do I have to add my child 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.
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.
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 161%. Other reports have found 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 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
If you’re planning to add your child to your car insurance policy, you might be wondering when is the right time to do it. Ideally, 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’ll be 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 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.
Another popular discount is for good students. If your teen gets good grades in school, they might qualify for savings. 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.
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 2020. 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 discounts, 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.
Can I drop my child from my car insurance?
Yes, you can take your child off your car insurance policy whenever you want. 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 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.