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Getting Off of Your Parents’ Car Insurance

Getting off your parents' car insurance and purchasing you own policy for the first time can be intimidating. Our guide makes it easy for young drivers looking for affordable auto insurance!

young driver leaning out car window giving thumbs up

How long should you stay on your parents’ car insurance policy?

There’s no definitive answer to the question of how long you can remain on your parents’ car insurance policy. There’s no age at which a child is forced to purchase their own policy.

Most people leave their parents’ policies when they move out of the house. There isn’t a defined age when this occurs of course; it varies from person to person. Often it’s when people graduate high school, or college. But it’s usually when you’re financially stable.

Car insurance can be expensive for a young person (less than 25 years old). So it’s important that you’re financially stable before you take on the challenge.

Most insurance providers require households to have all vehicles under one policy. According to Nasdaq, the reason for this is insurers assume all drivers in a household drive each other’s cars. That’s why everyone should be on one policy. It minimizes risk for the insurance provider. That's because it helps them calculate the amount of coverage each family member and car will need.

Some insurers will make your parents exclude you from their policy when you get your own insurance. It’s important that you and your parents are on the same page about this. That’s because you wouldn’t be covered if you borrowed your parents’ car and got into an accident.

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How much coverage should you buy?

Young adults buying auto insurance on their own for the first time should do a lot of research first. It’s a complicated decision. There are many insurance companies, coverage types, and factors that can affect your rates. You want to make sure you’re getting the best deal on the right coverage. And there are a few ways to do this.

Your first step in picking a policy is to determine what type of coverage you need. There are at least seven coverage types that a car insurance policy may contain, depending on the your state. Click here to see which coverage types and amounts are required in your state.

It's important to note the minimum insurance requirements in each state are just that: the bare minimum legally required coverage. Very few states have minimum coverage amounts that provide adequate protection. Almost all drivers will want a policy with more than their state minimum coverage amounts. Learn more about why state minimum coverage is rarely enough here.

How much coverage to purchase beyond the minimum requirement is a personal preference. It depends on your current needs as well as what your provider requires. For example, as an employed young adult, you might not need as much personal injury liability coverage. That's because your health insurance and disability insurance through your employer might already cover most of that.

However, it’s wise to buy more than the minimum uninsured or underinsured motorist coverage. That's because you want to be protected if you get in an accident with an uninsured motorist. It’s wise to explore your options. You should fully understand what type of coverage you’re buying and how much of it you’re getting. That's why it's a good idea to get quotes and speak with insurance agents and brokers about your insurance needs.

Shop around for the best rates

Car insurance is more expensive for younger and older drivers. This means the rates you’re quoted will be relatively high when purchasing your first policy. This is probably much higher than the rates you were charged when on your parents’ policy. While 16-year-olds have the most expensive premiums, your rates will remain high until your 25th birthday.

There are several reasons young adults pay more for insurance than drivers over age the age of 25

  • Younger drivers are more likely to have accidents and file insurance claims
  • Most young drivers don’t have an established a credit history
  • Most young drivers aren’t married and can’t take advantage of the marriage discount
  • Very few young drivers own their own home. So they can’t bundle their car insurance with homeowners insurance

All of these are factors insurance companies will take into consideration when determining rates. That’s why young people have higher premiums than the average driver.

That's why we recommend shopping around and comparing auto insurance quotes to find the best rates. Don't accept the first insurance quote you receive. You can save hundreds of dollars on your premium depending on the policy and insurance company you choose.

Auto insurance discounts

Auto insurance can be expensive, especially if you’re a young driver. Luckily there discounts you may qualify for. If you have a good driving record, you could qualify for a "good driver" discount. Depending on your provider, the qualifications and discount itself may vary. Also, if you've filed few or no claims over an extended period of time, you might qualify for a discount. If you're a college student and have a good GPA you may be eligible for a good student discount.

If you use your parents insurance company when you get your own policy, they might give you a loyalty discount. Different companies offer different discounts with different eligibility requirements. So be sure to ask your carrier about any discounts you might be eligible for. They can add up and significantly reduce your rates. It's also a good idea to compare quotes from multiple insurers. One of them could offer a discount the other doesn't.

Frequently Asked Questions

Q: How long can I stay on my parents car insurance?

A: Technically, you can stay on your parents car insurance as long as you, and your parents, want. It doesn't matter if you live them or you've moved out. But most people purchase their own car insurance policies once they've moved out on their own.

Q: What are some tips to reduce my insurance rates?

A: The best way to reduce your premiums is to be less of a risk to your auto insurance company. If you install safety features in your car, or purchase a safer car, this might reduce your rates. Driving less can lower your premiums, too. Be sure to shop around and be aggressive about asking for any discounts you’re eligible for.

Q: I can’t find a policy with good rates, what do I do?

A: The age group breaking away from their parents’ policies are also the ones paying the most for car insurance. One way to avoid paying high rates is to find a stable job before buying your own policy. Another is building up your credit history. Insurance providers want people who are financially reliable. If you have bad credit, a high claims history, and no job, they may not want to insure you. It's important to have your finances in order before buying your own insurance policy. LLC has made every effort to ensure that the information on this site is correct, but we cannot guarantee that it is free of inaccuracies, errors, or omissions. All content and services provided on or through this site are provided "as is" and "as available" for use. LLC makes no representations or warranties of any kind, express or implied, as to the operation of this site or to the information, content, materials, or products included on this site. You expressly agree that your use of this site is at your sole risk.