How long can you stay on your parents’ car insurance?

Whether you’re heading off to school, starting a full-time job, or taking time to travel, there are a lot of details to figure out between turning 18 and becoming a financially independent adult.  

During this time, you may wonder, how long can you stay on your parents car insurance, on their health insurance, and as a dependent on their taxes?

Unlike health insurance and taxes, there are a lot more “ifs” and “maybes” connected to car insurance and remaining covered by the best car insurance companies. And, surprisingly, your age is not a factor. 

When you’re ready to shift to your own policy, you’ll want to start with a free, online quote comparison tool. To learn the best time to do so, keep reading. 

Do You Need Your Own Car Insurance Policy at a Certain Age?

If “age 26” is coming to mind, you’re likely thinking of health insurance, which does have age limits for being covered by parents. Car insurance, on the other hand, does not. 

Single adult children living at home can remain on the car insurance policies of their parents at any age so long as they meet other requirements, such as car ownership. Even then, there are some exceptions depending on your home state and your insurance company.

Whether you’re in your teens, twenties, or ready for your 50th birthday, you can usually be listed on parental auto insurance if you reside at home. For older adults, this can be a money-saving option when caring for an aging parent. 

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When Do You Need to Switch to Your Own Car Insurance? 

There are a few key markers that your car insurance company will use to determine whether an individual needs to be split off into separate insurance coverage. These include: 

• Residence – Insurance is designed to follow the car rather than the individual, so the general rule of thumb is related to proximity — if you’re not living in the home, you’re likely no longer driving the family car. This doesn’t apply to temporary changes in residence, such as college, but rather to when your legal address of record, or permanent address, changes.
• Car ownership – If you buy a car and the title is in your name, then that usually means you need auto insurance under your name as well. However, there’s some wiggle room based on your state, whether or not you’re still living at home, and whether you’re a full or co-owner of the car. If you do obtain separate car insurance while living with your parents, their car insurance company may require that they specifically exclude you from their policy in order to remove you from it.
• Marriage – If you say “I do” to marriage, then you’re likely saying the same to your own car insurance. Most companies consider marital status to be a firm change of family status, even if the married children still live with their parents. If still living at home, you may need to be listed as a driver on your parents’ policy as well.

While these are common enough to count on, there are some policy variances. Check with an insurance agent to explore exceptions to these rules. 

How to Shop for Your Own Car Insurance

When it comes to finding the best policy for the best price, comparison shopping is the way to go. This is true whether you’re switching to your own policy for the first time or have been with the same company for a few years. Rates, offers, and potential discounts change along with your circumstances. 

When you’re ready to shop, you can dive into the process with these steps: 

1. Learn your state minimums – States have different legal requirements around the bare minimum insurance you need to offset the cost of property and medical damage in an accident. 
2. Estimate your needs – How much is your car worth, and how much is it worth to you? If your car is damaged in an accident, do you need every scuff fixed as good as new, or is it a dinged-up mess already that you wouldn’t want to invest in further? This will help you decide how much coverage to choose beyond the minimum. 
3. Choose your deductible gamble – If you have a $250 deductible and policy-covered damage of $1,000, then you’ll pay $250 out of pocket and your insurance will pay the remaining $750. A low deductible sounds terrific, but it’s on one side of a seesaw with your premium costs on the other. If you go for a higher deductible (betting you’ll have fewer accidents), then you’ll pay less every month. 
4. Comparison shop – The best way to quickly compare costs between insurance companies is with an online tool that provides several quotes based on a short questionnaire you fill out. 
5. Read the fine print – Check out the company’s website and be sure you receive every applicable discount. This will help you ensure the lowest rate before you sign on the dotted line with the low-price winner.

How Much Will You Pay for Car Insurance?

Doing the math and researching insurance policy exceptions can pay off, as you’ll almost certainly be paying more for your own insurance policy, especially if you’re starting in your late teens or early twenties. 

Insurance rates are based on statistics, so whether you’re the most conscientious driver in the world or a speed demon, you’ll still be charged higher based on: 

• Age – As a whole, drivers under age 25 have more accidents and engage in riskier driving behaviors. In particular, teenagers pay higher rates.
• Driving record – An accident-free record doesn’t count for much if it’s only a few years long. Insurers are looking for enough years under your belt to classify your driving based on a longer time than you’ve been able to see over the steering wheel.
• Credit history – Another way statistics are used is based on a close alignment of driving records with credit history. If lenders find you to be in a low enough risk category to extend credit to, and your credit score reflects having made consistent payments, insurers believe you’ll drive more safely and with less risk.

However, it’s important to note that this practice is banned either fully or in part in California, Hawaii, Maryland, Michigan, Massachusetts, Oregon, Utah, and Washington.

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How to Save When You Switch to Your Own Car Insurance

Insurance companies try to balance the impact of young age and the limited driving and credit history that goes along with it by offering policy discounts that take your behavior into account.

You can find discounts with most insurers for: 

• Good grades – Good student discounts are widely available. For any high school and college student, a grade point average higher than 3.0 can provide up to a 25% discount.
• Mileage – If you don’t use your car a lot, you may qualify for a low mileage discount. Track your mileage over the course of a month (then by year going forward), or tally up how long your usual commute, errands, and other car trips take. 
• The fancy factor – If you’re driving a used sedan versus a pricey sports car, you’ll pay lower insurance premiums based on both the replacement and repair costs, as well as whether the make and model you choose are statistically more prone to risky driving habits. 
• Usage-based tracking – If you don’t mind a little Big Brother peeking over your shoulder, many insurance companies have a range of options that take them along for the ride with you. From a mobile app to a device installed in your car, usage-based programs can provide savings if your insurance provider can confirm you’re traveling within speed limits and using other safe driving habits.

Case Studies: Duration of Coverage on Parents’ Car Insurance

Case Study 1: Age and Dependency Criteria

John just turned 21 and has been covered under his parents’ car insurance policy. However, his parents’ insurance company has a rule that allows coverage for dependent children until the age of 25. As long as John remains financially dependent on his parents and meets the criteria specified by the insurance company, he can continue to stay on their car insurance policy until he turns 25.

Case Study 2: Student Status and Residence

Sarah is a college student who lives away from home during the academic year but returns home during breaks and vacations. Her parents’ car insurance policy includes a provision that allows coverage for dependent children who are full-time students and temporarily live away from home.

As long as Sarah meets the requirements and maintains her student status, she can remain on her parents’ car insurance policy during her college years.

Case Study 3: Marriage and Financial Independence

Mike recently got married and is covered under his parents’ car insurance policy. However, the insurance company has a rule that removes coverage for dependent children who get married or achieve financial independence. Since Mike is now financially independent and has his own car, he can no longer stay on his parents’ car insurance policy and must obtain his own coverage.

Case Study 4: Changes in Circumstances

Samantha is covered under her parents’ car insurance policy. However, her insurance company has a rule that terminates coverage for dependent children once they establish their own residence and vehicle.

Samantha moves to a different state for a job opportunity and purchases her own car. As a result of these changes, she is no longer eligible to stay on her parents’ car insurance policy and must secure her own coverage.

Switching to Individual Auto Insurance: Frequently Asked Questions

Still not sure if you should switch? Here are the answers to a few questions you may still be wondering about.

#1 — Who Decides How Long You Can Stay on Your Parents Car Insurance?

Aside from their willingness, how long you remain on your parents’ policy depends on both insurance company policies and state laws. 

Some states require the individual listed on the car title to be the insured party. This may or may not be reinforced by insurance company policies, but it’s common enough that you’ll need to look for the exception to the rule if you want to be a registered car owner and stay on the family policy. 

While there are a lot of common practices across insurers, be sure to read the fine print and ask questions when you’re considering a change. 

#2 — Does Auto Insurance Coverage Change if You Move Away for College?

Even if you’re across the world and take a family car with you, so long as your permanent address of record remains the same, most insurance companies will allow you to remain covered under your parents. 

If you’re moving out of the home without taking a car with you and only returning between semesters, your parents may qualify for a discount based on your lowered use of their cars. 

#3 — Should You Stay with the Same Insurance Company as Your Parents?

Even if your parents are convinced their insurer is better than sliced bread, you need to shop around. Chances are, you’ll be able to find: 

• New coverage options
• New discount options
• New companies 

In some instances, a family connection may provide entrance to an insurance company that is not available to the general public. For example, USAA provides car insurance, but USAA membership is limited to active or retired military and their spouses and children. 

It’s great to have an additional insurer available to choose from, but you still need to compare rates and terms to find the best fit for you.

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Making the Best Choice for Insurance

While key life changes will require you to sign up for a new auto insurance policy—moving out permanently, getting hitched, or buying your own car — it doesn’t have to be a painful process. 

Be sure to comparison shop now, and again at age 25 and every few years following. You may see savings based on having a longer driving history (with a clean record), as well as new discounts that you might qualify for as your life changes. 

Why not get started now? It only takes minutes to use our online car insurance comparison tool and see what rates you qualify for.

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