Can you buy a car and use your parents’ car insurance?

Owning your car has its perks, but it also has some financial drawbacks. You’ll have to pay for the vehicle and related expenses that your parents used to pay for. We’re frequently asked, “If I buy a car, can my parents insure it?”

Luckily, you may be able to get cheap car insurance under your parents’ policy. However, this may mean that the insurance company determines that the premium on your parents’ car insurance needs to increase 300%. It’s still better than having uninsured drivers out there, but it is a pricy option.

Start comparing car insurance under your parents’ policy with other companies in your local area by entering your ZIP code now.

Will I save money if I stay on car insurance under my parent’s name?

While you can have auto insurance in someone else’s name, the rates depend on a few different factors, including your location, the company you’ve chosen, and whether or not you’re a high-risk driver, among others. Going a little deeper some places will look at your credit score and your driving record, but not always. When your parents add you to their auto policy, their rates may increase. However, your parents can get policy discounts if you’re a good student, if you’ve taken a defensive driving course, and if you’re away at college.

Let’s compare what car insurance rates would be like for your parents if they are insured and if they’re eligible for policy discounts.

This is just one example of how discounts can what a family policy would look like. When your parents are eligible for student discounts and several discounts, it could lower their average cost considerably.

There are two different types of classifications for a car insurance policy. According to the International Risk Management Institute, Inc., some of them are labeled as rated drivers, and others are listed as named insured. It’s important to be able to distinguish between the two when you’re trying to get coverage for yourself. Your classification matters when it comes to buying a new car and can be the deciding factor for what your monthly rate is going to be.

A rated driver is someone who either lives in the home or drives listed vehicles regularly. When the driver is rated, they have permission to drive the vehicles at any time, but they also affect the premiums.

A named insured will typically be a driver, but they also own the policy, which means that they receive payments from a claim, and have the authority to make changes to the car insurance policy halfway through the year or at any other point in time.

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How long can you stay on car insurance under your parents?

You can be covered under your parents’ car insurance as a teenage driver, and as a dependent. One of the main reasons why you’re allowed to get coverage under your parents’ policy as a dependent is because the parents are liable for damages that their dependent children cause in their car.

If the insurer didn’t cover dependents, parents would then be stuck paying for damages even though they have insurance. The scenario changes when your adult child no longer lives in your home because they won’t be a resident of the home that is covered under the auto policy, rendering them a non-primary driver. If they live outside of the home, they don’t have to be added to the policy unless you feel the need to add them.

Do you need car insurance coverage when you buy your first car?

The answer here is absolutely. Anyone who has never owned a car might not know what they have to do when they purchase one. If you’re about to buy a car and you don’t know how to prepare, you need to find out what the requirements are first. You can either ask your parents, or you can call the customer service of the company you’re interested in. They’ll be able to provide you with more information and with some policy service options.

In almost all states, you have to prove that you have insurance at the dealership before you can drive off. The dealer must verify that the buyer has coverage for the new car, or drivers will be at risk. You’ll have to prove you have more than just mandatory coverage if you’re financing the car.

Is it cheaper to be on your parents’ car insurance policy? The short answer is yes. The longer answer is that your parents can receive discounts when they add you to their policy, which could end up saving them money.

A frequently asked question that crops up is, “what happens if I don’t add my child to my auto policy?” Your child will then have to get a separate policy if they’re going to drive, and it might be even more expensive for them. Some insurance companies may decide not to insure a child if they’re a minor. A licensed driver is generally someone over the specific age required in a specific location, and that age threshold is usually unwavering.

If I finance a car can my parents insure it?

You might be able to get away with covering your newly purchased car on a liability-only policy when you’re paying cash for a car, but not when you’re financing a car. Taking out an auto loan is a good way to build credit, but when you drive a financed car, you’re required to cover the vehicle.

You’ll need at least the following coverage:

• Bodily Injury
• Property Damage
• Comprehensive Car Insurance Coverage (with acceptable deductibles)
• Collision (with acceptable deductibles)

Start comparing car insurance rates in your local area by entering your ZIP code in the FREE comparison box below.

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Do car insurance policies have automatic coverage provisions?

You don’t have to rush to buy insurance if you already have sufficient coverage in place. All standard car insurance policies have an automatic coverage provision in place that extends coverage to newly acquired vehicles for a limited time. In the state of Virginia, this provision will also apply to rented cars and vehicles that qualify as temporary substitutes.

If the car is eligible to be covered as a newly acquired automobile, it will receive the same type of coverage that you have on your current policy. If you have multiple vehicles, the newly acquired vehicle will have the broadest form of liability and first-party coverage found on the policy.

If you don’t have full coverage on your policy and you’re buying a new vehicle, you will have a short time where the insurer will give you full coverage. In most states, you’ll get at least four days of full coverage on an additional vehicle if it’s purchased after the term took effect. You will have to add the car for full coverage after the four days are up. Make sure to ask if this grace period is offered, never just assume that it’ll be there for you!

Will your new car be eligible for coverage under your parents’ car insurance?

One of the problems with the automatic coverage provision is that you might not qualify for coverage on your vehicle if you’re not a named insured on the policy.

Can you be on your parents’ car insurance if the car is in your name? If you’re buying the car in your name and you’re the only registered owner, you may not have automatic coverage.

There are ways to ensure that you’ll have automatic coverage under your parents’ car insurance. One way is to buy the vehicle with one of your parents so they’re on the registration. Another way is to ask the insurer if you’ll qualify for the extension because you’re an adult child living in the home.

Being covered under your parents’ policy has its perks, but you’re not guaranteed to have that option.

If you can’t add your vehicle to the policy because of your age or your address, you need to buy your policy.

It’s not too late to start shopping for car insurance in your local area. Enter your ZIP code in the FREE comparison tool to get started.

FAQs: Can you buy a car and use your parents’ car insurance?

The final section will go over questions people frequently ask on search engines across the web. We’ll also recap what you’ve learned and give you insight on what to expect when you insure a vehicle under your parents’ car insurance policy.

#1—Can I stay on my parents’ car insurance if I move out?

Yes. Many drivers choose to stay on their parents’ car insurance policy to be eligible for more discounts such as the Family Plan discount. It’s also cheaper for all drivers on the policy.

#2—Can a married child be on parents’ car insurance?

One of the most popular discounts on car insurance is the multi-car or multi-vehicle discount. The more people you have included on the policy, the more money you may end up saving.

#3—When should a child get their own car insurance?

There are many reasons why a child should get their own insurance. As the primary car insurance policyholder, you can remove the child’s car at any time.

#4—Can I be on my parents’ car insurance if I’m married?

If the circumstances are necessary, then yes.

#5—Can a 26-year-old be on their parents’ car insurance?

Yes. Family plans and multi-vehicle plans are some of the methods policyholders use to save money on car insurance.

#6—Can I be on my parents’ car insurance if I don’t live with them?

Yes. If you’re a student in college, working a job, etc, you are eligible you can be your parents’ car insurance policy.

#7—How long can you be on your parents’ insurance?

As long as your vehicle is in your parents’ name and you use their address as your permanent address, you could stay on their insurance indefinitely.

#8—Is my child covered under my car insurance?

You MUST add your teen and their vehicle to your car insurance policy for them to be insured.

#9—Should parents pay for car insurance?

If the child is a minor, yes. Teens usually pay more expensive car insurance rates, but with parents monitoring the teens driving, they can save money through their parents. It’s easier for teen drivers if the parent pays the policy.

#10—Can I drop my child from my car insurance?

Yes. As the primary policyholder, you can drop them at any time, but make sure the child isn’t driving without insurance.

Compare car insurance under your parents’ policy online by entering your ZIP code, and you can find an affordable plan.

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