How Long Can (and Should) You Keep Your Teen or Young Adult on Your Insurance Policy?

General rules for teens on parents' car insurance

A common misconception is that teens "age out" of eligibility for car insurance under their parents' policy. That's because some types of insurance, such as health insurance, do have an age limit; for health insurance, teens and young adults are only eligible for coverage under their parent's policy until the age of 26.

Car insurance is different. There’s no upper age limit, so your child can stay on your policy through their teens, 20s and even beyond, as long as they meet other eligibility criteria.

Keeping your child on your policy can make sense, particularly for teens, since it's often less expensive to add a teen to an existing policy than it is to buy them their own policy. 

Factors affecting eligibility for car insurance on another's policy

Although age doesn't affect your child's eligibility for coverage under your policy, there are other variables that can: 

• Location: Where your child lives is the biggest factor in determining whether they can be on your policy. If your child is a permanent resident of your home, they're eligible for coverage. Even if they leave home for several months — for example, if they take their car to college with them — they can still be on your policy as long as your home is their permanent residence.
• Vehicle ownership: Who owns the vehicle and whose name is on the title may affect your child's eligibility for coverage. Depending on your state and insurer, only vehicles that are owned and titled under your name can be covered under your policy. With some companies, if your teen owns the car in their own name, they may have to buy their own policy. 

When should your child get their own car insurance? 

There are some scenarios that may indicate it's time for your child to get their own coverage: 

• Your child is moving out: If your child is an adult and taking the next step toward independence by moving out on their own, they may need to buy their own policy. Once your child no longer lives in your home or uses it as a permanent residence, they usually need their own coverage.
• Your child is buying a car by themselves: If your child wants to buy a car in their own name — with only their name on the title — many insurers will require them to have an individual car insurance policy.
• They need significantly different coverage: If your child needs much different coverage than your policy includes, they may need their own policy. For example, they start their own business and require a policy that covers the commercial use of the car. 

Discounts for young drivers 

Whether you're adding a child to your policy or they're buying a policy on their own, they may be eligible for discounts that can make coverage more affordable. Teen and young adult drivers may qualify for one or more of the following discounts: 

• Good student: High school and college students who maintain good grades — usually a "B" average or better — may be eligible for good student discounts.
• Safe driving course: Some states and some insurers offer discounts to drivers who complete safe driving courses.
• Telematics policies: With a telematics policy, the insurance company bases premiums on the driver's driving habits as tracked by a device or mobile app. If they maintain good driving habits, such as obeying the speed limit, driving fewer miles and avoiding nighttime driving, they can save money.