The Bankrate promise
At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation of . Our content is backed by Coverage.com, LLC, a licensed entity (NPN: 19966249). For more information, please see our .
As a young driver, your car insurance is typically more expensive than the average. That’s because car insurance companies weigh the risk of insuring drivers when determining your rate, and less experienced drivers are at higher risk statistically of engaging in more high-risk behaviors. And, if you have a history of driving infractions, accidents or speeding tickets, that may further increase the cost of your policy, which can make it a costly expense for you to cover. Given the high average cost of car insurance for younger drivers, you may be wondering whether it’s possible to be added to your parents’ insurance policy in order to save money.
The answer is that it depends on the situation. While there are circumstances where it makes sense to stay on your parents’ auto insurance policy, there are other instances in which it makes more sense to get your own policy instead. And in some cases, it may be required that you get your own policy altogether. Knowing when it’s best to stay on with your parents versus going out on your own is essential to selecting the right coverage at this stage of your life.
When you can be on your parent’s car insurance policy
There are several scenarios where you can be on your parent’s auto insurance policy. This is ideal for many young drivers because you would have access to lower insurance rates than you would on your own policy. If you have wondered “Can I be on my parents car insurance if I move out” or if you are getting married, it’s important to know when you can remain on their policy and when you can’t.
You co-own the car with your parent
If both you and your parent co-own the vehicle, then most insurance carriers allow you to stay on your parents policy.
Your parents own the car and you live with them
If your parents are the owners of your car and you live at home with them, you can stay on their policy. This also applies if you get married and are living at home.
You are a college student and drive your parents car when you are home
If you only drive your car when you are home from college visiting your family, then you can stay on your parents’ policy as a regular driver. Depending on how far away you are from your home when living on campus, your parents may even earn a discount to reduce car insurance costs.
You move out but you live at a property your parents rent or own
You can stay on your parent’s policy even if you move out but you move to a property your parents rent or own.
When you cannot be on your parent’s auto insurance
On the other hand, there are some circumstances where you have to obtain your own policy, even if you are a younger driver. And remember, the best practice is to be truthful with the insurance company about where you live and how much you drive, otherwise you face the risk of the carrier denying your claims or canceling the policy.
When you own your car
If your car title is only in your name, then you have to obtain your own insurance policy and can not stay on your parent’s policy. This applies whether you live at home with your parents, you are away at school part of the time or you do not live with them at all.
If you do not live with your parents but they own your car
This is actually a situation where it depends on your insurance policy. Each insurance company has its own definition of a dependent child. However your carrier defines this determines if you can stay on your parent’s policy if you don’t live with them. The best practice is to verify with the carrier.
You are on your own financially
This is more of a judgment call, and not necessarily a determination of the insurance company. But if you are on your own financially, renting your own apartment or buying your own home, then it is wise to consider getting your own policy.
Should you stay on your parent’s insurance policy?
There are many factors to consider as to whether or not you should stay on your parent’s policy. One of the biggest factors driving this decision is cost. If you are under 25, it will likely cost less to remain on the parent’s policy than going out on your own. This is because younger drivers are associated with higher risks, which increases the insurance premiums.
While the costs are lower for you to stay on your parent’s policy if you are under 25, naturally the insurance rates for your parent’s policy will increase. Adding a young driver to a policy increases the rate because younger drivers statistically engage in more high-risk behaviors when they drive. Premiums can increase as much as 130% or more when adding a teen driver. When you obtain your own policy, you are relieving your parents of the additional cost burden of having a younger driver on their policy.
|Pros for staying on parents’ policy||Cons for staying on parents’ policy|
|Access to less expensive premiums typically||Increases parent’s policy premium by as much as 130%|
|Access to additional discounts, such as multi-driver and Good Student||Cost burden for parents|
Frequently Asked Questions
There is not one specific car insurance company that’s the best option for every driver. That’s because each driver will have certain factors that they use to determine what the best options are for their own unique needs. For example, your budget and coverage options may be important to consider, but you also may consider customer service and digital assets to be important too. It may be helpful to shop around and get quotes and coverage options from numerous companies. Then you can compare what the options are for you and determine which one works best for your specific situation.
There is no expiration date for how long you’re allowed to stay on your parents’ car insurance policy. If you meet the criteria set by your insurer, you typically have the option of staying on your parents’ policy. However, it doesn’t always make sense to stay on a parent’s policy. For example, as you get older and achieve certain milestones, like living on your own, you may need to transition from their policy to your own car insurance policy instead.
Your insurance costs may decrease at age 25. At this age, insurance companies generally consider you a more experienced driver, and as such, you are less likely to engage in higher-risk behaviors such as speeding, which can lead to lower rates. However, car insurance rates can vary widely between insurance companies, and you will likely need a driving record that is clean of traffic violations and accidents to access the lowest rates at any age.
Fortunately there are ways to lower your insurance costs even with a teen driver. The most effective way is to take advantage of any and all discounts. Discounts range from multi-driver and bundling, to Good Student and Defensive Driving discounts. Comparison shopping multiple carriers is another way to insure you are receiving the most competitive rate for your premiums with a teen driver.
Correction, Feb. 10, 2023 2:35 pm ET: A previous version of this article incorrectly referenced coverage is provided under “permissive use” when you drive your car when you are home from college visiting family. It has been updated to clarify that you should stay on your parents’ policy as a “regular driver” in this scenario.