When Should We Kick Our Kids Off Our Car Insurance?
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Dear Chuck:
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My question is on adult children and car insurance: I need to figure out if I should put my adult son on our insurance policy. We've all had accidents (so no judgment here), but he just hit a deer, got a speeding ticket, and also got into an accident with our car not long ago. If we get him his insurance, he will be paying about $3,100 per year (he just got a job that pays about $500 per week). Are we better off putting him on our policy and have him pay us, or should he get his own policy?
Worried Mom.
Dear Worried Mom,
My hope is that your adult son would be able to have a policy in his name and assume full responsibility for his own coverage. It is easy for our children, no matter how old, to come to parents first for help, but there is a time for us to teach them how to manage on their own.
When we read Proverbs 22:6, that we need to "train up a child in the way that he should go," few of us realized how much work it would be when in comes to cars!
But to fully answer your question, we need to do some research.
First, check to see the age at which your insurance provider will no longer allow an adult child to be added to your policy. In some cases it is age 21 while others extend to age 25, at which time insurance rates can go down by as much as 20 percent because after that point, most of us don't have as many accidents.
Second, it all depends on where the child is living. If a child (young adult) is living at home, it is possible to keep him or her on your insurance almost indefinitely.
Third, it matters if the child has a car registered in his or her own name. If the child is driving a car registered to the parents, most insurers will let you keep it on the same policy. But if he or she buys a car, the expectation is that they will have their own insurance.
Fourth, it can depend on whether or not your child is married. If an adult child feels mature enough to start their own family, then they should be prepared to get their own car insurance.
As a general rule, insurance that parents are subsidizing is generally less expensive. But you will want to get quotes from several insurance companies for all scenarios.
And you can find some excellent quote comparison sites out there like Nerd Wallet where you can do a little research before you talk with your own insurance agent.
If your child can save some significant money by joining the family policy and will be responsible to pay his portion, then that is certainly a good choice. But whatever you decide, insist that your adult child talk through the process with you, so that even if you choose to keep him or her on your insurance, they can learn about the kinds of research and choices that need to be made in making an insurance purchase.
You can help your children learn to budget, spend, save, give and even how much insurance should cost, by clicking here.
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