Getting a driver’s license for the first time often instills a new sense of independence in teenage drivers. Despite this newfound freedom, most teen drivers aren’t independent when it comes to their car insurance.
For most younger drivers, it’s cheaper for parents to add a child to their existing car insurance rather than taking out a separate policy. And minors typically can’t enter a legal contract — which can include buying car insurance — but it depends on the state.
Most car insurance companies don’t have rules that dictate how long you’re allowed to remain on your parents’ car insurance policy. But some circumstances might force you to purchase car insurance on your own. Here’s what you need to know.
Taking out a car insurance policy in your own name may feel like a rite of passage to a new driver. But in most cases, staying on your parents’ car insurance policy for as long as possible is the most affordable option. The average cost of car insurance for teen drivers is $198 per month for liability coverage and $350 per month for full coverage.
If you’re living with your parents or you’re a full-time college student, sharing an auto insurance policy is usually fine. But as your situation changes, your auto insurance coverage might need to adjust as well.
Here’s when you typically can and can’t remain on your parents’ car insurance policy.
As with any financial decision, staying on your parents’ car insurance policy comes with advantages and disadvantages. Below are some pros and cons to consider before you make a decision about the solution that’s best for you.
One of the main reasons that drivers older than 18 stay on their parents’ car insurance policies is because they want to save money. In many cases, remaining on a parent’s car insurance can help you lock in a lower insurance premium.
How much sharing car insurance can save you depends on your unique situation, including your ZIP code, vehicle, and more.
Here’s a comparison of average monthly auto insurance rates for people 18 and older — drivers who stay on a parent’s policy versus drivers who purchase their own insurance.
Whether you stay on your parents’ policy or purchase car insurance of your own, you can take steps to try to lower your car insurance rate. Drivers have numerous options to save money on car insurance — both as teens and young adults. Here’s how to do it:
Check out Insurify’s guide on factors that affect your auto insurance rates, and read the answers to questions about how long you can stay on your parents’ car insurance below.
When you live in the same household as your parents, you should be listed on their car insurance policy as a named driver. However, if you don’t live at the same address as your parents, you may be able to borrow your parents’ vehicle on occasion with their permission, despite not being on their insurance.
If you move away for college but plan to move back to your parents’ address, you may be able to stay on your parents’ car insurance policy. But once you move to a separate, permanent address, you’ll need to set up a car insurance policy in your own name.
A married child may be able to stay on their parents’ car insurance in certain circumstances. However, they must reside at the parents’ home to share the same car insurance policy. Otherwise, they need to purchase their own car insurance coverage.
You can buy car insurance by working with an insurance agent, purchasing a policy directly from a car insurance company, or shopping online through a marketplace. No matter how you choose to buy your own car insurance policy, it’s smart to compare quotes from several insurance companies to make sure you find the best deal available.
If you temporarily move out of state, such as for college, but plan to live at your parents’ home during school breaks, an insurance company may let you remain on your parents’ insurance policy. But if you’re moving out of state to live at a permanent address, you’ll need to buy your own car insurance.
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