The Perks of Staying on your Parents’ Car Insurance Policy

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UPDATED: Sep 2, 2020

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Here's what you need to know...
  • Keeping car insurance under your parents’ policy will keep your rates low
  • You can’t stay on parents car insurance if married
  • Certain factors, like marriage or driving record, can cause you to be removed from your parents’ policy

Becoming a licensed driver is a great step toward independence, so it may seem like the next natural step is to get your own insurance policy. Should you get your own policy or keep car insurance under your parents?

It turns out that it’s much wiser to stay on your parent’s auto policy for as long as possible, regardless of whether you are an occasional driver or a primary driver of your vehicle.

Do I have to be on my parents’ car insurance? No, you don’t have to be on your parents’ policy but sometimes it’s cheaper.

If you insure yourself, then you’ll face high premiums. But if you get a policy under your parent’s insurance, then your cost of car insurance will be much more affordable.

When you are ready for your own policy, you should shop around to make sure you are getting the best deal. Enter your ZIP now to get quotes for your own car insurance policy.

Staying On My Parents’ Policy

According to AAA, most states have a minimum liability requirement for car insurance for all drivers, whether you are on your parents’ policy or if you have your own policy.

Is it cheaper to get your own car insurance? No, most often it will be cheaper for young drivers to get car insurance on their parents’ policy.

In addition to saving money, getting insurance under your parents will help you establish an insurance history.

As with credit, having a history of coverage can help you become less of an insurance risk, and will, therefore, enable you to reduce the cost of auto insurance once you do establish your own policy.

Let’s take a look at the average annual cost of car insurance based on your age and gender if you have your own policy.

Average Annual Car Insurance Rates Based on Age and Gender
CompaniesAverage Annual Rates for a Single 17-Year-Old FemaleAverage Annual Rates for a Single 17-Year-Old MaleAverage Annual Rates for a Single 25-Year-Old FemaleAverage Annual Rates for a Single 25-Year-Old MaleAverage Annual Rates for a Married 35-Year-Old FemaleAverage Annual Rates for a Married 35-Year-Old MaleAverage Annual Rates for a Married 60-Year-Old FemaleAverage Annual Rates for a Married 60-Year-Old Male
USAA$4,807.54$5,385.61$1,988.52$2,126.14$1,551.43$1,540.32$1,449.85$1,448.98
Geico$5,653.55$6,278.96$2,378.89$2,262.87$2,302.89$2,312.38$2,240.60$2,283.45
Nationwide$5,756.37$7,175.31$2,686.48$2,889.04$2,360.49$2,387.43$2,130.26$2,214.62
State Farm$5,953.88$7,324.34$2,335.96$2,554.56$2,081.72$2,081.72$1,873.89$1,873.89
American Family$5,996.50$8,130.50$2,288.65$2,694.72$2,202.70$2,224.31$1,992.92$2,014.38
Farmers$8,521.97$9,144.04$2,946.80$3,041.44$2,556.98$2,557.75$2,336.80$2,448.39
Progressive$8,689.95$9,625.49$2,697.73$2,758.66$2,296.90$2,175.27$1,991.49$2,048.63
Allstate$9,282.19$10,642.53$3,424.87$3,570.93$3,156.09$3,123.01$2,913.37$2,990.64
Travelers$9,307.32$12,850.91$2,325.25$2,491.21$2,178.66$2,199.51$2,051.98$2,074.41
Liberty Mutual$11,621.01$13,718.69$3,959.67$4,503.13$3,802.77$3,856.84$3,445.00$3,680.53
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Teens pay around $700 a month for car insurance but 60-year-olds only pay about $190 a month.

Teens and young adults pay much more than older adults. That’s because with age comes driving experience, and the car insurance company has a longer driving track record to examine.

Can I drive my parents’ car without insurance? No, you must be insured in order to drive, whether it’s your car or your parents’ car.

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How long can I stay on my parents’ policy?

NOLO says that spouses and children are covered on a car insurance policy if they live in the same house.  This means you should be able to stay on your parents’ insurance policy for as long as you meet a few requirements to be considered “dependent”.

Keep in mind that becoming fully independent from your parents isn’t a black-and-white circumstance – it involves factors like financial independence, having your own apartment or house, or owning your own car.

In this context, “dependence” is not the same definition that the IRS uses for tax purposes; you can be considered financially independent for tax reasons but still stay on your parents’ insurance policy.

Similarly, insurers don’t define your independence in black and white terms, and they look at each person’s situation on a case by case basis to determine whether a young driver can remain on their parents’ policy, or if they must get their own separate policy.

Unlike being on your parent’s health insurance policies, car insurance doesn’t end at 26 years old. There is no age limit that can cause your removal.

That means that whether you choose to live at home or go off to college after high school, you should be able to stay on your parent’s policy.

Because age is not a factor, you can, therefore, keep car insurance on parents’ policy until you meet one of the circumstances that are listed below.

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Causes of Removal From My Parents’ Policy

Now that you know you can stay on your parent’s car insurance, let’s look at how to stay on your parents’ insurance. The following are all factors to take into consideration when insuring a child on parents’ car insurance policy.

Accident History

Poor driving can cause you to lose your parent’s insurance coverage. Multiple accidents can lead a company to declare you as too high of an insurance risk, and you will either need to get your own policy or pay higher insurance premiums.

Your driving record is just one of the factors that affect the price of car insurance, and companies charge more for drivers with a lengthy accident history.

Take a look at how one accident, speeding ticket, or DUI can affect your car insurance rates.

Average Annual Rates by Driving History
CompanyAverage Annual Rates with Clean RecordAverage Annual Rates with 1 AccidentAverage Annual Rates with 1 DUIAverage Annual Rates with 1 Speeding Violation
Allstate$3,819.90$4,987.68$6,260.73$4,483.51
American Family$2,693.61$3,722.75$4,330.24$3,025.74
Farmers$3,460.60$4,518.73$4,718.75$4,079.01
GEICO$2,145.96$3,192.77$4,875.87$2,645.43
Liberty Mutual$4,774.30$6,204.78$7,613.48$5,701.26
Nationwide$2,746.18$3,396.95$4,543.20$3,113.68
Progressive$3,393.09$4,777.04$3,969.65$4,002.28
State Farm$2,821.18$3,396.01$3,636.80$3,186.01
Travelers$3,447.69$4,289.74$5,741.40$4,260.80
USAA$1,933.68$2,516.24$3,506.03$2,193.25
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One accident alone can raise your car insurance rates around $80 a month. Multiple accidents or tickets will cause your rates to skyrocket.

Watch this video to learn more about how your driving record affects your car insurance rates.

Your driving record is one of the major factors in determining your car insurance rates. A clean driving record will save you thousands of dollars a year.

Financial Independence

The situation gets a little tricky if you establish independence from your parents. Living on campus and being supported by your parents will keep you on their insurance policy without being contested.

If you move into an apartment and start supporting yourself, your insurance company may want to revisit your individual situation and may decide that you have what is called care, custody, and control of the vehicle.

This essentially means that you are fully responsible for the car. That, in turn, can cause the car insurance company to drop you from your parent’s policy.

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Marriage

Can a married child stay on parents’ car insurance?

Another factor that can cause your removal from your parent’s policy is marriage. If you get married, you are no longer considered a dependent, and insurance companies will expect you to get your own student car insurance policy. So, when asking “can you stay on parents car insurance if married,” the answer is generally no.

Is car insurance cheaper when married? On the plus side, your car insurance rates will decrease when you get married. Most companies believe that married people are more cautious so they offer lower rates.

A DUI Charge

Additionally, DUIs are an expensive mistake. Drinking and driving not only causes insurance companies to place you under a high-risk category, but you may not need to wait for the company to take you off your parent’s policy; your parent may choose to remove you first.

If you want to stay on your parent’s policy, make good driving choices, and don’t get a DUI. That way, your insurance company will continue to see you as low risk and your parents won’t mind sharing their policy with you.

You’ll save much more money in the long run if you go that route, instead of pursuing independent insurance coverage.

If your current insurer notifies you that they’ll be removing you from your parents’ insurance policy and forcing you to buy your own policy, you may be able to shop around as a family and find another insurer who will keep you all on the same policy, saving money for everyone.

If you are removed from your parents’ policy, you need to know how to get on your own car insurance. The best way to find the right coverage at the cheapest price is to shop around and compare car insurance quotes. Enter your ZIP now to shop for your own car insurance.

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