Car Insurance for Kids: a Guide

How should you handle car insurance for a child not living at home or a new teen driver?

Car Insurance for your child — how to handle it


Your children cannot age out of eligibility for your car insurance policy. The only way a child can become ineligible for car insurance coverage is if they move out of your residence. If your 30-year-old son still lives with you, he can still be on your car insurance policy. Although this seems simple, it can get complicated. Let’s explore the ins and outs of car insurance for kids.


Navigating car insurance for young drivers
  1. Are you required to add your kids to your car insurance policy?
  2. Can a child have their own policy?
  3. When can you remove them?
  4. What’s the cheapest car insurance company for kids?
  5. FAQ section and additional resources





Adding kids to your car insurance policy: is it required?


In truth, it depends on your state and your car insurance company. If your child has a driver's license and uses your vehicle, they need to be added to the policy. If they have a learner's permit, however, that can vary. Most states will extend policy coverage to a young driver with a learner’s permit. This may vary based on the age of the driver and your location, so check your policy documentation for verification.

If your insurance company requires you to list your son or daughter on your policy but they won’t be using one of your vehicles, you can list them as an “excluded driver” under most car insurance policies. An excluded driver is someone in your household that isn’t allowed to use your vehicle.

Car insurance companies like to understand the risks they face. This is why they want anyone with a driver's license to be listed on the policy (even if they aren’t going to regularly drive the vehicle).

If you want your child to use your vehicle and carry adequate coverage in the event they're involved in an accident, add them to your policy. Most car insurance companies require anyone who uses the vehicle more than 12 times a year — this may vary by insurance policy — to be added as a covered driver.





Can your child have their own car insurance policy?


Getting car insurance for your teen driver will likely be expensive. Insurance companies see them as risk-takers behind the wheel and charge higher premiums to cover that perceived risk. If you’re worried about the price or having your teen driver’s claims on your insurance record, you might be thinking about getting them their own policy. Unfortunately, teen car insurance policies can be a little hard to acquire.

Insurance companies don’t like to issue two policies to one listed residence. The easiest way to go about securing two car insurance policies in one household is to speak with an insurance agent, as regulations will be very company-specific.





When can you remove your child from your car insurance policy?


There isn’t a set age at which a child must be removed from their parents' insurance policy — purchasing car insurance is usually something that occurs alongside another life event. If your son or daughter moves out of the house drives a vehicle at their new residence regularly, they should be removed from your policy and get their own car insurance. Because car insurance is priced by zip code, their full-time residence should be listed on the policy.





What’s the cheapest insurance for teen drivers?


Because car insurance is designed to match you, this can be a tricky question to answer. But we aim to please. Using methodology detailed here, we created a family profile and surveyed some top insurance companies to see which one was the cheapest. See below the cheapest car insurance companies for two parents and their 17-year-old child. .


Family Premium with a Teen Driver

Company Premium
State Farm $2,999
Allstate $2,295
Geico $987
Progressive $1,231
Liberty Mutual $1,676

Consider, however, this data is reflective of a generalized profile and won’t necessarily fit you. Use it as a jumping off point and begin your search with Geico and Progressive, but don’t end it there. Shopping for car insurance every six months is the best way to make sure you’re getting a good rate.




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Car insurance for your kids: FAQ and resources


The many variables involved in car insurance pricing can make giving advice tricky. Here are some frequently asked questions regarding car insurance and kids. If you’re looking for more articles in which you can find specific rates, see here.


Can I pay for my kid’s policy if I’m not on it?

Most car insurance companies will allow a different person’s payment information on file as long as the individual consents.


How does it work if my son/daughter has a policy with a vehicle I own?

For example, if you own the vehicle and the title is in your name but your son/daughter is the primary driver. In this scenario, your child would still have the insurance in their name and at their listed address, but have you listed as an “additional interest.” Additional interests can often be a bank or lender or in this case, whoever owns the vehicle. If the vehicle were to be totaled or otherwise damaged, a check would be written to this individual or entity.


How does it work if my child uses the vehicle randomly?

If your child is an infrequent user of the vehicle, meaning they use the vehicle less than 12 times a year, they can be covered under the “permissive use” section of your insurance policy. While we strongly recommend checking your policy prior to make sure actually have this coverage (as it’s not always standard), they might be covered under it.


When do rates tend to drop for teenagers?

This can really vary. For female drivers, it tends to be around 19-year-olds but for males it can hover around 21-years-old. Again, this would be dependent on your child having a clean driving record - i.e., no accidents, tickets, or citations.


Does my daughter with a learner’s permit need to be added?

Most states don’t require drivers with a learner’s permit to be added to your policy. Usually, coverage will extend to them as it would a licensed driver. However, when she is licensed, you will need to add her to the policy.


Is it cheaper to have my child get their own policy or keep them on mine

Anything related to price will be tricky to answer. But, generally, it is much cheaper to keep your teen on your policy rather than getting them their own policy. As an older driver, you help decrease the risk presented by a teen in the eyes of an insurance company.





Additional resources:


Still got questions or want to see more rates? See our additional articles:





Methodology


We randomly selected five zip codes in different areas in the US by using the five most popular insurance companies based on net premiums written. Here are the zip codes we selected:


  • Columbus, OH - 43216
  • McKinney, TX - 75070
  • Fresno, CA - 75070
  • Scranton, PA - 93722
  • Aurora, CO - 80013

We created a base teen driver profile using male and female drivers with two parents and two vehicles. This is the information we chose to use:


  • Parent's DOB: 08/01/1960
  • Mother's Vehicle: 2015 Toyota Sienna LE, owned, driving 12,000 miles/year
  • Father's Vehicle: 2015 Toyota Crewmax, owned, driving 12,000 miles/year
  • Driving Record: no accidents or citation
  • Education: BA
  • Licensed at: 16
  • Occupation: Manager Level - Accounting
  • Insurance History: Max amount selectable of previous years with insurance company, limits at 100/300/100

Next, we needed to create the profile of the teen drivers; one that is female and male. Here is the information:


  • Teen's DOB: 08/01/2000
  • Teen's: 2015 Toyota Carmy, owned, 12,000 miles/year
  • Driving Record: no accidents or citation
  • Education: Above B Above
  • Licensed at: 17
  • Occupation: None




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