Adding Your Child to Your Car Insurance

Adding your child to your car insurance is a fairly simple process, but it comes with unique challenges, from increased premiums to added stress. In fact, some families may choose to delay adding a child to their insurance policy to reduce costs and minimize the complications that come with getting on the road as a teen. In this guide, we’ll explore the legal and financial implications of adding a child to car insurance, along with practical guidance for completing the process.

Does my child have to be on my car insurance?

If your child has a driver’s license, lives in your household and drives a car that is registered at your address, they will need to be added to your car insurance policy.

Adding your child to your car insurance is more than a technicality. It ensures that, if your child is in an accident while driving, any injuries or damage to your property or others’ will be covered as specified in your policy. If your child isn’t listed on the policy before an accident occurs, not only could your claim be denied, but you could also be dropped by your insurer for failing to provide accurate information.

If your child is under 18 years old, they’ll need to be added to your policy rather than getting a separate policy of their own. Because a car insurance agreement is a legally binding document, minors (16- and 17-year-olds) can’t get one of their own. Once your child turns 18, they’ll have the option to get their own car insurance, but this typically isn’t the most affordable or practical option (more on that later).

The primary exception: if your child is of legal driving age and chooses not to get their driver’s license, you don’t need to add them to your policy. Or if they have a license but you don’t plan to let them drive your vehicle for the foreseeable future, you may be able to list your child as an excluded driver. But remember that if they do drive and are involved in an accident under these circumstances, you could lose coverage.

Benefits of adding your child to your car insurance policy

Although you will probably see a premium increase when you add your child to your policy, there are benefits as well. Some common advantages to adding your child as a driver on your auto insurance policy are:

• Lower premiums for your child: If your teen is 18 or older, they could purchase a policy in their name (assuming they own, lease or finance their own car). However, car insurance for 18-year-olds on their own is generally pretty expensive, with an average annual rate of $7,367 per year for full coverage. If your teen lives with you and if your name is also on their vehicle, they’ll likely save money by staying on your policy.
• Qualifying for new discounts: There are plenty of car insurance discounts available for teen drivers, especially if they’re willing to take a defensive driving course or driver education. You might also be able to offset some of the cost of adding your teen driver by taking advantage of discounts like a good student discount or distant student discount.
• 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.

Additionally, adding your teen to your car insurance policy could present a learning opportunity. By involving your teen in the shopping process, you can teach them how to read a car insurance policy and help build their financial literacy.

Costs of adding a young driver to your car insurance

Adding any driver to your auto insurance can cause your premium to change — and in the case of teens, you’re likely to see a significant increase. The table below compares the average annual cost to add a young driver (aged 16 to 20) to an existing policy with two married adults.

Parents who add a driver under age 21 to their auto policy see an average premium increase of $2,411 per year — just shy of the average cost of car insurance for a single driver. Your rate increase may be even higher in some situations, such as if:

• Your child is male: Statistics show that teen boys have a higher risk of accidents and violations, so insurers tend to charge more for policies with young male drivers.
• You’re adding a new car to the policy: Buying a car for your teen could raise your rates further, especially if you’ve opted for a new vehicle or one with a reputation for unsafe driving, such as a sports car.
• Your teen has a history of accidents or tickets: Even a single speeding ticket on your child’s record could amount to a substantially higher premium.

When to add your child to your car insurance

Generally, you need to add your child to your car insurance policy as soon as they get their driver’s license. To be safe, though, you may want to contact your insurance provider before your child starts driving.

Some states, such as Florida, provide insurance carriers with “risk alert” reports. These reports advise insurers of any licensed drivers that list the insured’s address on their driver’s license. After receiving risk alert reports, carriers usually reach out to policyholders and request one of the following:

• That the unlisted driver be added to the policy
• Proof that the unlisted driver is insured elsewhere
• Proof that the unlisted driver resides elsewhere

Official documents like a utility bill, rental agreement or deed are typically accepted as proof of residence. Failure to prove that the unlisted driver is insured elsewhere or resides elsewhere requires that they be added to the policy. In addition, failure to provide the appropriate information to allow the unlisted operator to be added to the policy could lead to midterm cancellation or nonrenewal of the auto policy.

How to add your child to your car insurance policy

The simplest way to add your child to your car insurance policy is to contact your agent. You’ll need to have the child’s personal information and driver’s license number ready, along with information about any vehicles you may be adding.

If you’re hoping to qualify for discounts, you may also need:

• Proof of your child’s grades
• Driver education course completion documentation
• School information (if they attend college away from home, and you’re seeking a distant student discount)

However, because of the steep cost of adding a child to your insurance, it’s worth shopping around before putting a teen on your existing policy. While your current rate may have been the best available deal when you purchased it, you might be eligible for lower premiums, better discounts or more advantageous coverage options from a different carrier.

To cover all your bases, consider taking the following steps to add your child to your car insurance:

• Research cheap car insurance carriers for families: Bankrate’s research indicates that Nationwide, Auto-Owners and Geico are among the cheapest insurers for teens on their parents’ policy, but it’s also worth looking at affordable regional or local insurance companies that may offer competitive quotes.
• Talk to your current agent about available discounts: While your base premium will increase when you add your child to your policy, your carrier may offer discounts that could significantly offset the price increase.
• Compare discounts from other carriers: Once you’ve taken stock of the teen-focused discounts your current insurer is offering, see how they compare to the discount opportunities available with other carriers. For instance, most insurance companies offer discounts for students, but the amount of the discount can vary significantly based on your provider.
• Request quotes from your current provider and other carriers: Examine the financial bottom line by requesting quotes from several companies. While price may be primary here, keep in mind other key factors, such as customer service and claims handling, that could make a difference with a teen on your policy.

When should your adult child get their own auto insurance policy?

Unlike health insurance, there’s no specific age when your child can’t be listed on your auto insurance policy. As long as they are still living with you and you have an insurable interest in the vehicle they drive, your child should be able to stay on your policy. However, if any of the following factors below apply, it may be time for your child to be on their own policy.

• They are married or have children of their own
• They are the sole owner of the vehicle they drive and do not live in your household
• They are financially independent

If none of the above factors are in play yet, many insurance experts recommend keeping your teen or young adult on your policy in order to save money. For many young drivers, the cost of auto insurance is a significant deterrent to getting a standalone policy.

Frequently asked questions

• Can your insurance company force you to add your child to your auto policy?
  

  If your child holds a valid driver’s license and lives at the same address as you, your car insurance company can force you to add them to your policy. A car insurance policy typically specifies that all licensed household members must be listed drivers. Depending on your state laws, it may be possible to have your child listed as an excluded driver — which constitutes a guarantee that they won’t drive your insured vehicle — but some states and carriers won’t permit this.

• Does my child need to own a car to have insurance?
  

  No, your child does not need to own or lease a car to have car insurance. As long as your child is driving a vehicle owned by you or someone else in your household, they should be added to your car insurance policy. Generally, drivers under the age of 18 cannot purchase their own car insurance policy, as minors cannot legally enter into a binding contract.

• What information do I need to add my child to my policy?
  

  You’ll likely need your child’s name, date of birth and driver’s license number. You may also need their Social Security number. If your child qualifies for a good student or distant student discount, you may need proof of their grades (like a recent grade card) or proof of the school they attend without a car (like an admissions letter with the school name and address on it).

• What happens if I don’t add my teenager to my car insurance?
  

  Choosing not to add a licensed teenager to your car insurance exposes you to some potential negative consequences, including denial of claims and nonrenewal or cancellation of your policy if your teen is involved in an accident. If your teen doesn’t have a driver’s license, however, it may be easier to keep them off your insurance or to have them listed as an excluded driver.

• Can you exclude your child from your car insurance?
  

  It depends on where you live and how the vehicle is titled. Some states don’t allow driver exclusions on policies, while others will only allow you to exclude a driver if they have their own car insurance policy. Additionally, different insurers handle this issue differently. It’s a good idea to speak with your insurance agent or company to understand how exclusions work and whether you can exclude your child from your auto insurance policy.

• How can I save money on car insurance for teens?
  

  Adding a teen to your policy presents a good opportunity to shop your coverage with different car insurance carriers. You might find that the cheapest car insurance company for you before adding your teen is no longer the cheapest option. Taking advantage of discounts is another solid strategy to save money, as is educating your child about safe driving habits so they maintain a clean driving record.