What are the pros and cons of getting my own insurance?
While the minimum age when you can earn a driver’s license varies by state, most of us start driving while living at home as teenagers. This means that most teen drivers have the option to join their parents’ car insurance policies or to get their own. Keep reading for important information on when you can be on your parent’s car insurance, the cost of insuring teen drivers, how to save and more.
Although there’s some variation between providers and policies, your parent’s car insurance typically does not cover you automatically, assuming you live in the same household. You will either need to join your parent’s insurance policy or get car insurance of your own.
If you’re not listed on your parent’s car insurance, there are two ways you can be covered when driving their car:
Review your parent’s insurance policy together since different insurers may have different exceptions to who qualifies as a permissive user. Certain insurance policies may not cover young or inexperienced drivers as permissive users.
Unlike health insurance coverage, which can cover dependent children only up to age 26, there’s no age limit on using your parent’s insurance. Rather than age, auto insurance is based on household — that is, family members who live at the same primary residence.
In other words, as long as you live with your parents, you can stay on their insurance. You can even stay on their insurance if you get married, provided you continue to live together. If your spouse moves in, they could join as a household member as well with insurance for the whole family.
Less expensive premiums for drivers under 25
Access to discounts like multiple vehicles, good student and student away at school
Increases parent’s premium
Especially expensive if there’s a luxury vehicle or sports car in the household, even if the teenager doesn’t drive it
If it’s not clear whether or not you can be on your parent’s car insurance, it’s vital to contact your insurance company and find out. You don’t want to be wrong and get into an accident only to find out you’re not covered when you thought you were.
Teenagers are some of the riskiest drivers, so they are among the most expensive age demographics to insure. According to the National Highway Traffic Safety Administration, teenagers made up only 5 percent of all licensed drivers in 2020 but accounted for 9 percent of all drivers involved in fatal crashes.2 The Centers for Disease Control and Prevention’s Department of Transportation Safety lists the following risk factors in teen driving:
The amount that your parent’s premium will increase if you join their insurance policy depends on a variety of factors, such as the number of young drivers in the house, your age, your gender, the types of cars your family owns and your driving records.
The chart below shows the average annual cost of auto insurance for teens compared to the insurance premiums for adults.
|Age||Average annual cost of car insurance|
If you join your parent’s auto insurance policy and their premiums rise, there are a variety of tactics you can use to minimize that price increase.
When it comes to adding a teen driver to car insurance, your parents need to add you to their policy. You won’t be able to join without the policyholders adding you and supplying the insurance company with your information, such as your:
If you decide not to join your parent’s policy, you’ll need to get your own car insurance. Wondering how to get car insurance? Follow these steps:
Teenagers and other young adults are some of the most expensive drivers to insure, thanks to their inexperience and unsafe driving behaviors. From a teenager’s perspective, it’s beneficial to stay on your parent’s car insurance for as long as you can, provided it doesn’t make their premiums too high. Take advantage of all relevant discounts and other ways to save to minimize that premium increase as much as possible and avoid teen driver crashes.
Yes, you can have your own car insurance and be on your parent’s at the same time, but there’s no reason to do so. It’s expensive and filing claims on the same car with two different insurers constitutes fraud.
Yes, people in the same house can have different car insurance policies. However, you’d likely be able to save money by joining the same policy.
Gender matters in the cost of car insurance, especially among teenagers. In most U.S. states, male drivers tend to face higher insurance costs. That being said, the following states prohibit insurance companies from using gender as a factor in determining rates:
A policyholder is a person who owns a car insurance policy and has control over it. A listed driver is covered by the policy but doesn’t control it and can’t make changes.
“Permissive Use” Car Insurance Coverage. NOLO. (2023).
Traffic Safety Facts 2020 Data: Young Drivers. National Highway Traffic Safety Administration. (2022, Jun).
Teen Drivers and Passengers: Get the Facts. Centers for Disease Control and Prevention. (2023).