How long can you stay on your parents’ car insurance?

How long can I stay on my parents car insurance?

It depends. While Lee’s situation was an unusual one, unlike other types of insurance, like health insurance, there’s usually no mandated cutoff age for kids to get off their parents’ car insurance.

Yes, you can be 40 and still live at home and stay on your folks’ policy. According to the Pew Research Center, it’s becoming more common for young adults to live with their parents instead of living on their own. Among 25- to 29-year olds, over one third were living with their parents. 

How are you covered by insurance if you have a license?

If you have passed the permit stage, you live in the home, and you have a license you’ll need to be listed on the policy for coverage. This is because all licensed drivers fit the household member and resident relative requirement.

Since each of these types of drivers needs to be listed, failing to name anyone in the home can be dangerous, especially if you end up needing to file an insurance claim.

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Reconsider your auto insurance policy after graduation

Many parents generally opt to retain teens on the family’s automobile insurance policy until they graduate from college, assuming they find employment and live away from home. At this point they should be paying for their own housing, food and credit card bills, building up a positive credit rating. Automobile insurers consider an applicant’s credit score among several other factors in their underwriting. Assuming a clean driving record and a solid credit history, there’s a good chance of a competitive premium. “By developing a better credit score, most everyone can secure auto insurance at a lower cost,” Hartwig says.

Some parents may decide to continue keeping their children on the policy for a period after their graduation. But if the child can afford paying for his or her own auto insurance, this is the time for the family to sit down and talk about it.

Is gender is a factor in auto insurance rates?

Along with age, gender plays a role in insurance costs. Young female drivers generally require fewer claims than young men, and, as a result, their insurance rates are lower.

Can you stay on your parents’ auto insurance if you own your own home?

If your child owns their own home or apartment, then an insurance company will consider them to be financially independent, and will no longer allow them to be on your insurance.

How To Reduce Insurance Rates For Teens On Their Parents’ Car Insurance

Teens are expensive to insure, especially teen boys. This is because teens, as a population, more often engage in reckless driving behavior. While they have faster reflexes than their adult counterparts, teens are less experienced and generally have poorer risk-assessment skills.

There are ways to reduce your teen’s car insurance costs, and certain providers offer more discount options than others. If you have State Farm auto insurance, there’s a program called Steer Clear® that teaches teens safe driving practices and monitors driving behavior. It is available for drivers under 25 and will reduce insurance premiums for those that use it. Read more in our State Farm insurance review.

There are some discounts commonly available to teen drivers, like good student discounts, though availability varies among states and providers. Ask your provider if any of these options are available to you.

Discount Details
Good student discount Students with good grades may be eligible for discounts. Geico offers premium reductions for students with a B average or higher.
Student away at school discount Your car insurance company may offer a discount if your child is attending college. This discount applies during the months that your child lives away and doesn’t have access to your car.
Safe driving discount Many providers have apps that monitor your driving and reduce rates for driving safely. 
Low mileage discount If your teen doesn’t drive often (say just to school and back), they may be eligible for a low mileage discount.
 

Ask your car insurance provider what other options you have for reducing premiums for teen drivers.

When You Can (or Must) Stay on Your Parents’ Car Insurance

In certain cases, a child may be able to remain on their parents’ policy, even if they move to another address. But always check with your insurance agent about the provider’s requirements and any state insurance laws that apply.

  • You live at home and drive a shared vehicle: Children who live at home and are of driving age usually must be listed on their parents’ car insurance policy, even if they have their own car and separate policy. Typically, insurers will require that all household drivers are listed to assess risk when setting your premium.
  • You’re away at college but still use the family address: If you move out to attend college and take a car registered in a parent’s name (or jointly registered), you may be able to stay on your parents’ policy instead of purchasing your own. This exception is less likely if you live off-campus and away from your parents’ home year-round.
  • You regularly drive your parent’s car: Children who regularly drive their parents’ vehicles should be listed on the insurance policy, regardless of where they live.

Is it cheaper to stay on your parents’ plan?

The younger you are, the more expensive it is to get auto insurance. For instance, the annual premium for a teen driver ranges between $3,819 and $4,048. Once you reach age 25, your premium will drop significantly. However, it would still likely be much more expensive to get your own plan. Once you reach your 30’s, the perceived risk of your driving ability will drop in the eyes of insurers. If you live at home till then, you’ll likely see the lowest rates by staying on your parent’s policy. 

There are a few different factors that make it cheaper to stay on your parents’ policy. The first is that as more experienced drivers, parents on the policy typically add a lower risk level to balance out the risk associated with a younger driver. The exception, of course, is if your parents have a bad driving record.

Insurance companies may also offer a discount when more drivers are bundled on one policy. Called a “multiple drivers discount,” it’s one of the main reasons that it’s cheaper to have one auto insurance plan per household, rather than per driver.

Own Car, Own Policy

If you are living with your parents and have a car titled in your name, and it is insured in your name, most companies will not require you to be listed on your parent’s policy. Some companies, however, may require your policy to have the same liability limits as your parent’s policy.

The takeaway

  • There’s no age limit to stay on your parents’ auto policy
  • You must live at home to qualify
  • Premiums usually drop when you turn 25 years old

Can a college student stay on their parents’ policy?

For current college students, if you drive a car under your parents’ name and use your parents’ address as your permanent place of residency, you’re still covered under their car insurance policy during that time.

Also, if you have a car under your parents’ names and insurance policy and don’t bring your car to college, you may qualify for a discount for drivers who don’t drive at school. Your vehicle registration should also list your parents’ house. You should still be mindful of your driving habits as well at this point.

A bad driving record can impact the cost of the policy, no matter who has their name on it.

How Long Can You Be On Your Parent’s Auto Insurance Policy?

You can stay on your parents’ auto insurance plan indefinitely. There is no age cutoff, as long as you live at the same address. If you have your own car, that vehicle needs its own insurance policy or needs to be listed on your parents’ policy. The policyholder for any particular vehicle usually needs to be the person named on the title. This doesn’t matter if you are 16 and living at home or 26 and on your own.

College students who live at home during the summers or go to school full-time usually remain on their parents’ insurance policies. Kids are only ever “off” their parents’ policies after they leave the nest for good. If you move out or choose to no longer be included on your parents’ car insurance policy, simply notify your insurance company.

If you are a parent, you may be able to exclude a child from your policy (and reduce your premium), by contacting your auto insurance company and assuring them that the child no longer lives with you. To do so, you might need to prove that your child has their own primary residence depending on their age.

How to Save Money While on Your Parents’ Car Insurance

If your parents add you to their auto insurance policy, their rates will increase by a lot. Fortunately, there are some things you can do to reduce the rate hike. First and foremost, maintain a clean driving record free of accidents and violations. Also, make sure you have a safe and affordable vehicle as its make and model can play a role in your car insurance rates. Driving a newer car with the latest safety features can lead to lower rates.

Additionally, search for discounts from major car insurance companies like GEICO, State Farm, and Allstate as well as smaller ones, as they can help bring down your premiums. If you’re a full-time high school or college student, you might land a discount for having good grades or a certain GPA. You can also qualify for a discount if you complete a defensive driving course or are temporarily away from home for college.

Depending on the car insurance company your parents chose, you might be able to save money by agreeing to use a monitoring app. A monitoring app will track your driving habits and potentially lower your premium if you show a history of safe driving and/or drive less frequently during dangerous times, like rush hour.

Should You Stay On Your Parents Insurance Plan?

There are many factors to consider as to whether or not you should stay on your parent’s plan. 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 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

Shopping for your own insurance

Forced to start shopping for his own insurance, Lee quickly found himself falling into a rabbit hole.

His search expanded to getting quotes from 28 different insurance companies. Each of them had different coverage levels and protections.

He also found that some companies were still stuck in the dark ages. There were old school web form applications, lack of instant quote calculators, a requirement to call into a sales hotline, for starters. After many frustrating moments, Lee finally landed on a company and coverage level that worked for his car and situation. 

If you’re moving out of your parents’ place and need to get your own car insurance, you’ll want to start shopping around for car insurance now. That way you won’t be stuck without insurance, and in turn, aren’t able to drive your car.

Can I be on my parents’ car insurance if I’m married?

If you and your spouse live with your parents and drive their vehicles, you can stay on their car insurance policy as listed drivers. If you or your spouse owns a vehicle, you can decide to insure the vehicle on your own car insurance policy or on your parents’ policy. All drivers that share the same permanent residence should be listed on each policy. If you’re married and don’t live with your parents, you’ll need your own policy.

Can You Still Be on Your Parents’ Car Insurance When You’re Newly Married?

If you get married and continue to live with your parents, you may be able to remain on their auto insurance policy. But if you move to another address, your insurer will probably require that you get your own policy.

Benefits of Staying on Your Parents’ Car Insurance

The younger you are, the more you’ll spend on car insurance. On average, you can expect to pay between $3,819 and $4,048 per year as a teen driver. Once you hit age 25, however, your auto insurance premium will go down significantly. Despite this, it will still be more expensive to get your own plan.

When you turn 30, insurance companies will consider you to be much less risky of a driver. As long as you’re still living at home at that time, you can score the lowest rates by remaining on your parents’ auto insurance policy. There are a few reasons it’s cheaper to stay on your parents’ auto insurance.

First off, your parents will balance out your high-risk level as a younger driver. Of course, this won’t be the case if they have a bad driving record full of accidents, speeding tickets, and other traffic violations. Also, insurance providers might offer multiple driver discounts for policyholders who insure multiple drivers through their one policy.

If you’re on your parents’ car insurance plan, they’ll be eligible for this discount.

Different car insurance rates for teenage girls and boys

Teens on a family’s car insurance policy will be rated higher and differently, based on their gender, than older adults. “If two parents have boy-and-girl fraternal twins, each getting their driver’s license at the same time, the girl will initially receive a better rate than the boy, based on statistical data indicating a lower risk of accidents involving teenage girls,” says Kevin Lynch, assistant professor of insurance at The American College of Financial Services in Bryn Mawr, Pennsylvania.

Here’s why: According to the Insurance Institute for Highway Safety, 9.2 teenage male drivers die in automobile accidents for every 100 million vehicle miles, nearly double the death rate of 5.3 for female teenagers. This explains why insuring a teenage son typically costs 25% more than insuring a teenage daughter.

Over time, as both genders build their driving records, other insurance underwriting factors come into play. “When the daughter turns 21, assuming she has a clean driving record, she will be treated for rate purposes as an adult and given standard adult rates,” Lynch says. However, boys may not have standard adult rates until they reach age 25 if they have a clean driving record. Regardless of gender, teaching your teens safe driving is of the utmost importance, both for insurance rates and their safety. Here are some teen driving safety tips to help you get started.

There are other nuances to consider. According to Lynch, a child living at home or going away to college or graduate school will be allowed to remain on their parents auto policy with no additional fees until age 24, unless he or she has purchased a separate insurance policy.

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