Insuring Your Child's Partner

Typically, you must add your child to your car insurance policy when they get their driver's license. This is a legal obligation if they live with you and will be driving a vehicle registered to you or someone in your household. While it can be costly, it is generally cheaper than your child taking out a standalone policy.

When to add a child to car insurance

Another factor to consider is whether the child is living at home or has moved out. If your child has moved out and has their own vehicle, they are typically required to obtain their own insurance coverage. However, if they are still living at home and driving a vehicle registered to your household, they must be added to your policy. This is true even if they only plan to drive occasionally, as insurance providers require all licensed drivers residing in your home to be listed on your policy.

It is important to note that the cost of adding a child to your car insurance can be significant, with premiums increasing by up to 150%. However, it is generally more cost-effective to add a child to an existing policy than for them to obtain their own insurance. There are also discounts available for teen drivers, such as good student discounts and driver's education course discounts, which can help offset the increased cost.

The cost of adding a child to car insurance

Adding a child to your car insurance is a requirement in most cases and is also often the cheapest option. While it is possible to exclude your child from your car insurance, this is only recommended if they do not plan on driving. Excluding your child from your car insurance will result in lower insurance costs. However, if they get behind the wheel and are in an accident, your insurance company will not cover the damages, and there may be other consequences, such as policy cancellation.

The cost of adding a child to your car insurance can vary depending on factors such as location, insurer, and the child's age. On average, it costs around $2,718 to $4,874 per year to add a child to your car insurance policy. The cost can increase your insurance premium by 70% to 161%.

How to Lower Costs

• Take advantage of student discounts for good grades or driver's education courses.
• Choose a safer, older vehicle for your child, as newer models tend to increase premiums.
• Increase your deductibles, but keep in mind that this will result in higher out-of-pocket expenses during claims.
• Look for limited-use discounts if your child's driving is mostly on weekends or specific days.
• Bundle policies and stick to one insurer for multiple insurance types, such as home or boat insurance.
• Encourage your child to maintain a clean driving record by educating them about safe driving habits.
• Compare rates and shop around for the best deals when adding a young driver to your policy.

When to Get a Child's Own Insurance

There are some situations where it may be more beneficial for your child to have their own insurance policy:

• If your child has moved out of the house, especially for college, and is driving there.
• If your child has a car registered under their name, they may be required to insure it separately.
• If your child has become financially independent and can comfortably afford their own insurance costs.
• If your child has a bad driving record, as this can increase your premiums.

Benefits of adding a child to car insurance

Adding your child to your car insurance policy is a requirement in most cases. While it can be expensive, there are several benefits to doing so. Here are some advantages to adding your child as a driver on your auto insurance policy:

Lower Premiums for Your Child

If your teen is 18 or older, they could purchase a policy in their name, but car insurance for 18-year-olds is generally quite expensive. If your teen lives with you and your name is also on their vehicle, they will likely save money by staying on your policy.

Qualifying for New Discounts

There are several car insurance discounts available for teen drivers. You might be able to offset some of the costs of adding your teen driver by taking advantage of good student discounts, distant student discounts, and teen driving programs.

Simplified Policy Management

Having your entire household on one policy could make it easier for you to make changes, pay bills, and keep track of your insurance documents.

Learning Opportunity

Adding your teen to your car insurance policy could present a learning opportunity. You could teach your child about car insurance, explain why it is important, and show them how to pay bills.

Continuous Coverage

Keeping your child continuously covered establishes their insurance history, which can help them secure better rates in the future.

Multi-Car Bonuses

If your child has their own car, you might be able to get a multi-car discount, softening the premium hike.

Risks of not adding a child to car insurance

Failing to add your child to your car insurance can have serious consequences. Here are some of the risks involved:

Policy cancellation and claim denial

If your child is not listed on your insurance policy and they get into an accident, your insurance company may deny coverage or refuse to pay for damages. This could leave you financially responsible for any property damage or injuries caused by the accident.

Driving without insurance is illegal

In most states, driving without insurance is illegal and can result in legal ramifications such as fines, suspension of the driver's license, or even jail time.

Increased financial burden

If your child is not listed on your insurance policy and gets into an accident, you may be responsible for paying for any third-party property damage or injuries out of pocket. This can result in significant financial burden, especially if the accident results in severe damage or injuries.

Difficulty obtaining insurance in the future

If your child is caught driving without insurance, they may be categorized as a high-risk driver, which could make it more difficult and expensive for them to obtain insurance in the future.

Negative impact on insurance rates

If your child is added to your policy after an accident, it can result in a significant increase in your insurance rates. It is important to note that insurance companies take into account the probability of a driver being involved in an accident when setting rates, and young, inexperienced drivers are considered higher risk.

Inability to drive

If your child is not listed on your insurance policy, they may be unable to legally drive, as most states require drivers to have insurance coverage. This can impact their independence and ability to carry out daily activities.

How to add a child to car insurance

Adding a child to your car insurance policy is a straightforward process, but it can be costly. Here is a step-by-step guide on how to add a child to your car insurance:

Step 1: Consult with your insurance agent

Before your child gets their driver's license or permit, consult with your insurance agent to understand the specific requirements and guidelines of your insurance company and state. Some states and insurance companies require you to add your child to your policy once they obtain their permit, while others only mandate it once they are fully licensed. Failing to notify your insurance company and add your child to your policy promptly can result in consequences, such as policy cancellation or non-renewal.

Step 2: Understand the costs and discounts

Adding a child to your car insurance policy will likely result in an increase in your premium. The exact increase will depend on various factors, including your child's age, gender, driving experience, and the insurance company's rating practices. According to Insure.com's analysis, adding a teen driver can increase rates by 70% to 150%. However, there are also discounts available that can help offset these costs. Many insurers offer discounts for young drivers, such as good student discounts, low-mileage discounts, and defensive driving course discounts.

Step 3: Get a quote and shop around

Contact your current insurance company to get a quote for adding your child to your existing policy with higher liabilities. It is recommended to increase your liabilities to 100/300/100. Additionally, shop around and obtain quotes from other insurance companies to find the best rates and explore their discount options.

Step 4: Add your child to your policy

Once you have found the best rates and discounts, add your child to your current policy or switch to a new insurer. Remember to ask about all applicable discounts when adding them to the policy.

Step 5: Monitor your child's driving and shop annually

Keep track of your child's driving behaviour and encourage safe driving practices to maintain low insurance rates. Additionally, shop around for insurance rates at least once a year to ensure you are getting the best deal. Check for new discounts, such as improved grades that may qualify for a good student discount.

Frequently asked questions