Why You Should Stay On Your Parent's Auto Insurance Policy, And Why You May Be Kicked Off It

As a teenager who has just received their first car, you have the option of staying on your parent's auto insurance policy or buying your own. Most young people find it beneficial to stay on their parent's policy because of one main benefit:

It's Inexpensive

It is cheaper to lump your insurance together with your parents than to buy your own. This is because insurers consider teenagers high-risk drivers. When you stay on your parent's policy, their rates go up a little, but the increase is rarely as much as you would pay for your own coverage.

Another reason why staying on your parent's policy is inexpensive is that they have a longer insurance history. This means the insurer has analyzed their driving history and can make an informed calculation of their premiums. As a teenager, your nonexistence insurance history results in higher rates. When you lump your insurance with your parent's, you benefit from their history. This continuous coverage becomes valuable when you one day buy your own coverage; it will result in lower insurance rates.

However, you risk getting kicked off your parent's coverage if:

You Move Out Of Your Parents House

Most insurers will only allow you to stay on your parent's policy if you are a member of the household. One criterion of being a member of your parent's household is by living in the same home with him or her. Therefore, you stop being a member of the household when you get your own place, which means you lose the privilege to stay on the parent's policy. This may happen, for example, when you start college and decide to stay in a rented house outside the school. Talk to an agent at Harris Insurance Services to learn more about this rule and any exceptions, like if you're staying in a college dormitory.

You Get Married

As a general rule, your parent's insurer only allows you to stay on the policy if you are still dependent on the parent. Marriage shows that you are independent, which means the insurer may require you to buy your own coverage. Also, you are likely to move out of your parent's house once you get married, which is another reason you may have to buy your own coverage as explained above.

You Become an Extremely High-Risk Driver

Finally, you can also lose your parent's insurance coverage if you become too much of a risk. For example, the insurance company may label you a high-risk driver if you have been involved in multiple serious accidents. The same thing may happen if you are convicted of driving under the influence (DUI).