Just like cell phone plans and health insurance, it's common for adult children to be included on their parent’s car insurance policy. Insuring young adults is expensive, so it makes sense for parents to keep adult children on their policy to save money. While there is no age limit to how long adult children can stay on their parent’s insurance, certain life events can require them to get their own policy.
To stay on their parents' policy, adult children should be:
1. Attending college with their permanent address at their parent’s residence, or,
2. Living with their parents.
Most car insurance companies require that all drivers in the household be listed on the policy. Therefore, your child will need to stay on your policy while living at home (unless they drive a car with a title in their own name).
Your child should get their own insurance policy if:
1. Their car title is in their name, or,
2. They do not live with you.
Adults who do not live with their parents - have moved out, maybe purchased a home or gotten married - typically should not be on their parents auto insurance policies (even if the title is still in their parents name).
The reason for this goes beyond financial independence. If an adult child lives on their own but is listed on their parent’s policy as a household member, it is possible insurers would not pay claims for accidents involving the child.
A simple rule of thumb:
If they don't live with you, it's time for their own policy.
Each situation involving parents, their children, and insurance is unique. If you’d like to learn more about what’s best for you and your family, give me a call or respond to this email. And if you decide it’s time for your kids to get their own insurance, I’m here to teach them the basics and find a policy that fits their needs.
Written by Abbie Pickering, Personal Lines Agent