Car Insurance with Kids

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

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Getting Car Insurance with Kids: A Guide

 

Deciding what to do with your insurance policy when you have kids seems simple but can get complicated. Let’s explore the ins-and-outs of car insurance with kids.

 

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 to remove kids from car insurance
  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?

 

It depends on your state and your car insurance company. If your child has a driver's license and uses your vehicle, they should be added to the insurance policy. If they have a learner's permit, they may not need to be listed on the policy. Most states 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. 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" within most car insurance policies. An excluded driver is someone in a household that isn’t allowed to use the insured vehicle. The benefit of designating a child as an excluded driver is the avoidance of the expensive premiums that come with insuring a young driver.

Car insurance companies strive to understand the risks they face. They want anyone with a driver's license to be listed on the policy, even if they won't drive the listed vehicle often.

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.

 


 

Should your child have their own car insurance policy?

 

Getting car insurance for your teen driver will likely be expensive. Insurance companies see young drivers as risk-takers behind the wheel, assessing 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 consider getting them their own policy. Unfortunately, affordable teen car insurance policies can be hard to come by.

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

 


 

When should 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 and drives a vehicle at their new residence regularly, they should acquire their own car insurance policy.

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 priced on an individual level, this is a difficult question to answer. However, we created a family profile and surveyed some top insurance companies to see which one was the cheapest for teenage drivers.

See below for the cheapest car insurance companies for a family of two parents and a 17-year-old driver.

 

Insurance rates for a family with a 17-year-old driver
CompanySix-month policy premium
State Farm$1,260
Allstate$1,698
GEICO$1,315
Progressive$1,574
Liberty Mutual$1,313

 

The above data reflects a general profile and won’t necessarily fit you. Use it as a jumping-off point and begin your search with GEICO and State Farm, but don’t end it there. Comparing car insurance rates every six months is the best way to make sure you find a cheap rate. See more info on our methodology here.

 

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Car insurance for kids: FAQ and resources

Below are some frequently asked questions regarding car insurance and kids.

 

Can I pay for my child's car insurance policy if I’m not listed on it?

Most car insurance companies will allow a separate party to be listed as a payee, as long as the individual consents.

 

Can my child be listed on an insurance policy if the parent owns the vehicle?

If you own the vehicle and the title is in your name but your child is the primary driver, the child would have the insurance policy in their name and at their listed address. You would be listed as an “additional interest.” Additional interests can be banks, lenders, or in this case, the owner of the vehicle. If the vehicle were totaled or damaged, the claim payout would go to the additional interest.

 

How does car insurance for teens work if the child uses the vehicle only occasionally?

If your child is an infrequent user of the vehicle — less than 12 times per year — they can be covered under the “permissive use” section of an insurance policy. We strongly recommend checking your policy prior to make sure you have this coverage (it’s not always standard).

 

When do car insurance rates drop for teenagers?

This varies by individual circumstances. Auto insurance rates for young female drivers tend to decline at 19 years old. Male drivers might not see their rates decline until the age of 21. This is contingent on the young driver's driving record — any accidents, tickets, or citations will lead to rate increases.

 

My child has a learner's permit. Do they need to be listed on my car insurance?

Most states don’t require a young driver with a learner’s permit to be added to their parents' policy. When the young driver is fully licensed, you should add them to the policy.

 

Is it cheaper to have a child get their own car insurance or keep them on their parents' policy?

Generally, it is much cheaper to keep your teen driver on a shared family policy, instead of getting them their own policy. Increasing the average age of the insured drivers on the policy helps push down rates by decreasing the total amount of risk insured by the underwriter.

 


 

Additional resources:

Still curious about how to insure your teen driver? See our additional articles:

Find affordable insurance for your family today!

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Ava Lynch LinkedIn

Based in Austin, TX, Ava has been in the insurance industry as a licensed agent for 4-plus years. Ava is currently one of The Zebra’s resident property insurance experts and has been featured in publications such as US News Report, GasBuddy, and Yahoo! Finance.