Adding your child to your car insurance
Young drivers can be costly to insure, but adding your teen to your policy is essential for keeping your coverage up to date. Failure to add a driver to your auto insurance policy may result in denied claims and out-of-pocket expenses, as well as insurance fraud. The insurance editorial team at StrongInsurance investigated the intricacies of adding your child to your car insurance policy, as well as when your child can be removed from your policy.
Do I have to add my child to my car insurance?
If your child has a driver's license and lives in your home, they will almost certainly need to be added as a driver to your policy. When your child is a minor, he or she is unable to obtain their own insurance policy. If your child lives in the household and drives a vehicle you own, they must remain on your policy regardless of their age, but it is also financially beneficial in many cases due to discounts you may be eligible for. When your child moves out on their own, they may be able to remain on your policy or must obtain their own policy, depending on the criteria of your state and insurance provider.
While some people are concerned about the rising costs of insuring a young driver, the price increase is for a reason. Drivers aged 16 to 24 are more likely to be involved in a fatal car accident, skip the seatbelt, and get behind the wheel after using substances, so insurance companies charge higher rates to account for this risk. Premiums, on the other hand, tend to fall as drivers get older.
Benefits of adding your child to your car insurance policy
Although you will most likely see an increase in your premiums when you add your child to your policy, there are advantages as well. The following are some of the most common benefits of including your child as a driver on your auto insurance policy:
- Lower premiums for your child: If your teen is 18 or older, they may be able to purchase a policy in their own name (assuming they own, lease or finance their own car). Car insurance for 18-year-olds on their own, on the other hand, is typically quite expensive. If your teen lives with you and has your name on their vehicle, they will almost certainly save money by staying on your policy.
- Qualifying for new discounts: Teen drivers are eligible for a variety of car insurance discounts. By taking advantage of good student discounts, distant student discounts, and teen driving programs, you may be able to offset some of the cost of adding your teen driver.
- Simplified policy administration: Having your entire household on one policy may make it easier to make changes, pay bills, and keep track of your insurance documents.
- Adding your teen driver to your policy: Adding your teen driver to your policy helps to provide coverage in the event of an accident. If your child is not listed as a driver on your policy but regularly drives one of your vehicles, coverage may be denied in the event of an accident.
Adding your teen to your car insurance policy may also present a learning opportunity. You could teach your child about car insurance, why it's important to buy it, and how to pay bills.
Costs of adding a young driver to your car insurance
Adding a teen driver to your car insurance policy will almost certainly raise your premium. We looked at average rates for teen drivers in a recent study on cheap car insurance for teens. Even from the cheapest car insurance companies, when 16-year-old drivers were added to their parents' policy, their portion of the premium ranged from $1,200 to $2,400 per year for full coverage insurance. When compared to the national average for full coverage auto insurance, which is $1,674 per year, younger drivers pay significantly higher rates.
The good news is that each year of driving experience reduces the cost of car insurance for young drivers (assuming they keep their driving record clean). The initial cost of adding your teen or young adult may seem exorbitant, but it will usually subside over time. When you add your teen driver, getting quotes from multiple car insurance companies could be a good way to find the cheapest coverage for your needs.
When do you add your teenager or young adult to your car insurance?
In general, you should add your teen or young adult child to your policy as soon as they obtain a driver's license. To be safe, you should contact your insurance provider before your child begins driving. Some employers may require your child to be added when they obtain their learner's permit rather than their driver's license.
Some states, such as Florida, provide “risk alert” reports to insurance carriers. These reports inform them of any licensed operators who have the insured's address listed on their driver's license. Following receipt of risk alert reports, carriers typically contact policyholders and request one of the following:
- That the policy be amended to include the unlisted operator.
- Evidence that the unlisted operator is insured somewhere else.
- Proof that the unlisted operator lives somewhere else.
Utility bills, rental agreements, and deeds are examples of official documents that are commonly accepted as proof of residence. Failure to demonstrate that the unlisted operator is insured elsewhere or resides elsewhere necessitates their inclusion on the policy. Furthermore, failure to provide the necessary information to allow the unlisted operator to be added to the policy may result in the cancellation or non-renewal of the auto policy in the middle of the term.
When should your adult son or daughter get their own auto insurance policy?
There is no set age at which your child must obtain their own insurance policy. There is no set age at which you must remove them from your car insurance policy as long as they are still living with you and you have an insurable interest in the vehicle they drive. If your adult child no longer lives with you, they may need to get their own policy, regardless of age, unless they qualify for the distant student discount offered by some providers.
Here are some other indicators that it is time for your child to get their own policy:
- They are either married or have children.
- They do not live in your household and are the sole owner of the vehicle they drive.
- They are financially self-sufficient.
If none of the aforementioned factors are present, many insurance experts advise keeping your teen or young adult on your policy. Laura Adams, a specialist in insurance, adds:
“The issue is that the cost of insurance for a teen driver is typically higher than the cost of adding a teen to a family policy. This is because insurers consider young drivers to be risky, and they do not have as many opportunities to save as older drivers do. Teens, for example, have a limited credit history, a short driving history, and are ineligible for traditional discounts such as loyalty, bundling, and insuring multiple vehicles.”
Frequently asked questions
Does my child need to own a car to have insurance?
No. Most younger teenagers do not own the vehicles they drive, and their names are not likely to be on a lease or loan. If your child is driving a vehicle owned by you or another member of your household, they must still be listed as a driver on your policy.
What information do I need to add my child to my policy?
You'll most likely need your child's name, birth date, and driver's license number. You may need their Social Security number as well. If your child is eligible for a good student or distant student discount, you may be required to provide proof of their grades (such as a recent grade card) or proof of the school they attend if they do not have a car (like an admissions letter with the school name on it).
How can I save money on car insurance for teens?
Adding a teen to your policy provides an excellent opportunity to compare car insurance quotes from various companies. You may discover that the company that was the cheapest before you added your teen is no longer the cheapest option. Taking advantage of discounts is another great way to save money, as is teaching your child safe driving habits so that they keep a clean driving record.