How Long Can You Insure Your Child on Your Auto Insurance Policy?

There’s a certain rite of passage that comes when you turn 16. Freedom. The freedom to get behind the wheel of a car and drive yourself wherever you want to go, with no need for Mom or Dad to serve as chauffeur. With that freedom sometimes comes the grown-up responsibility of car insurance. As long as the child lives at home, however -- be they 16, 18, 21 or 60 -- she can remain on a parent’s insurance plan.

When deciding if a child can remain on his parents' auto insurance policy, insurance agencies look first at place of residency. If parents and child live together, they can be insured together.

When a child moves away from home -- not counting going away to college -- she must set up her own auto insurance policy. The same goes for a child getting married. During the time she lives at home prior to marriage, it is perfectly acceptable for her to remain on her parents’ insurance policy. Once she says “I do,” she must obtain an auto policy of her own.

Ditto if the child buys her own car and has it registered in her name. If the car is registered to the parents, having everyone on the same policy is OK. But if the car is registered to the child, she may need to get her own individual auto insurance policy. Different insurance carriers handle this different ways, so be sure and check with your agent.

Younger drivers tend to get lower rates when they remain on their parents’ car insurance policy. For kids in high school and college, having a grade point average above 3.0 can lower the rate even more -- by as much as 25 percent. And maintaining a good driving record -- with no accidents and no tickets -- also helps keep the rate manageable.

Another factor that impacts rates is how far the car regularly travels. If you’re driving to school or to a job that’s close to home, your rate will be lower than if you have to commute for an hour or more to college or work.

The make and model of the car have an effect on the insurance rate, too. If the young adult driver is driving an expensive sports car that’s costly to repair, his rate will be higher than it would be if he drove a moderately-priced used sedan.

Once the adult child turns 25, her insurance rates typically go down -- sometimes as much as 20 percent. Why age 25? Statistics. According to the National Highway Traffic Safety Administration, drivers under the age of 25 are much more likely to be in an accident. The number of crashes and crash deaths for drivers age 16 to 19 is nearly three times the rate for drivers age 20 and older. Teenagers are also at greater risk for alcohol-related crashes, even though it is illegal for them to drink in all 50 states. Studies show that drivers age 25 and up are more responsible and have a significantly lower risk of being at fault in an accident. Your rates may not automatically drop at age 25, though. There are other factors that determine your insurance rates, including how long you've been driving. If you start driving at age 21, for example, you may not see your rates do down until you reach your late twenties.