How Long Can You Be on Your Parents’ Car Insurance

Updated on November 19, 2020
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For young people, the question of how long they can stay on their parents’ insurance is of big importance.

This is especially the case with the high price of car insurance that may cost much more than their salaries at their summer jobs or internships. At some point, they have to make the decision whether to get their own car insurance or stay on their parents’ plan and make them cover costs.

No matter what, there comes a point where it is time to get their own insurance. Understanding car insurance rates and other aspects of insurance policy is vital when choosing to own a car. 

Wondering how long can you be on your parents’ car insurance? How do you determine the best insurance policy for you and your car? Read on to find out.

What to Know About Car Insurance

The first thing to know is that car insurance doesn’t work exactly like health insurance. Unlike health insurance, where young adults can be cut off from their parents’ insurance when they turn 26, a child can stay on their parents’ car insurance. This is for as long as they want as long as they meet certain criteria that will make them eligible to stay on their parents’ plans.

A car insurance quote is an estimate of how much you or your parents will pay for a car insurance policy. An insurance quote for an individual driver is calculated based on the information you provide when signing up for their service.

Each insurance company uses its own unique formula to calculate a quote. So, no two quotes will ever be the same at every company.

Once you are aware of this, you can begin taking the first steps to start shopping for the right insurance policy for you as an independent driver. This can also be for your parents if they are trying to look for a reduced rate compared to when you were a younger child.

When looking at a quote, try and look at least three car insurance quotes online or from a company’s agent. By doing this, you can check whether you are getting a good price for the coverage you want and the guarantee of safety.

Types of Car Insurance

There are many types of car insurance policies and coverage that can get included in an individual or family plan. Some of the most common types are listed below.

Every US state requires a car insurance policy to include bodily injury liability. This type of insurance pays for any bodily injuries you cause to others in an accident.

Property damage liability is a type of insurance that covers any kind of damage done to other peoples’ cars, objects, or structures that your car hits during a collision.

The two liabilities listed above are mandated nationally, but what about on a statewide basis? In addition to the above, some states may also require uninsured motorist coverage. This type of coverage reimburses you if your car or vehicle gets hit by an uninsured or hit-and-run driver.

Underinsured motorist coverage is coverage that covers you if your car or vehicle gets hit by a driver who doesn’t have adequate insurance.

Personal injury protection (PIP) covers any injuries that occur for you and any other passengers. It can also cover any lost wages and funeral costs if necessary. (Note: this coverage may be only available in “no-fault” states.)

Collision coverage pays for any damage done to your car in the case of a collision with another car, object, or pothole. It is also made effective if your car flips over. 

A liability coverage policy covers any legal costs and payouts an insured party is potentially responsible for if they are found legally liable for any damage that occurs during a collision.

Comprehensive insurance will cover damage done to your car if the accident is caused by something other than a collision with another vehicle. For example, this can cover damage made from hail, flood, a fire, or an animal.

As you see, a typical car insurance policy covers many components that take care of various circumstances if there is an accident or collision. It is important to note that all these policies may not be available everywhere. If you are not sure which of these types of insurance you need, check your state’s list of minimum car insurance requirements.

Understanding Car Insurance Rates

Reasons why car insurance rates may be higher for younger drivers vary, but according to the Insurance Institute for Highway Safety, teenage drivers have crash rates nearly four times those of drivers aged twenty and older.

However, rates for young adults do tend to rapidly go down after they turn 25 since they are considered mature enough to be safer drivers. Even so, it is important to take note of car insurance rates that will both benefit the young driver and safety.

When comparing car insurance from different companies, you should consider these different questions.

  • Do the quotes feature the same types and levels of coverage?
  • How similar are the deductibles?
  • Do the insurance quotes feature any discounts that would benefit your circumstances?

Other factors that can come into play when getting a quote from an insurance company can include

  • The driver’s age
  • The driver’s gender
  • Number of miles you put on your car
  • Which car the driver buys
  • Driving history
  • Credit score history
  • Deductible amount (remember: the higher the deductible, the cheaper the premium)

In all kinds of insurance policies, the right policy should both combine safety and an affordable price.

How Long Can You Be On Your Parents’ Car Insurance?

Short answer: it depends.

By that, it means there is no specific age that young people have to be removed from their parents’ car insurance. But, you can stay on your parents’ insurance as long as you still live with them at their permanent address or go to school full-time.

For a driver still in school, if your parents still help to pay for their child’s housing, food, tuition, and other costs of living while they are living away, the child is not considered entirely financially independent yet. This is especially the case when the child still uses their parents’ address as their own.

If the child gets married, they are presumed by insurance companies to be financially independent. Therefore, they are not allowed to stay on their parents’ insurance and must create a new policy with their spouse.

In any case, you should seriously consider getting your own car insurance when you move out, get married, and/or register a car in your own name. Parents can call their own insurance company and provide proof that their child has their own primary residence depending on their age to let them know the child should not be on their policy anymore.

How to Save on Car Insurance When You’re Young

Many major insurance companies offer discount car insurance rates for students. As a student, if you are currently enrolled in school and get good grades, you could be eligible for a discount on your car insurance.

One of the big factors that may surprise people is their credit score. Some companies may consider the driver’s credit history as a determiner for how high the insurance premium will be, so it is important to maintain a great credit score. 

Other ways to get discounts include being a member of an organization, getting employed at a company that offers group discounts, or asking for a home and auto insurance bundle if the young adult in question is thinking of buying a home.

Another good option is if the driver can prove that they have installed anti-theft devices in their cars. Some companies can offer discounts if a car has an anti-theft system.

Transition Toward Independence With Car Insurance

At some point, every young person in a family wonders how long can you be on your parents’ car insurance.

The truth is that there are a variety of factors that can determine when it would be best to independently get their own car insurance. From understanding car insurance rates to figuring out if they are eligible for discounts, young adults need to consult with their families about what options done by car insurance companies would be best and how to pay for it.

If you want to read more articles about the business of healthcare and other important topics, check out the rest of our site.

The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.