Most people get their first auto insurance coverage by being part of their parents' policy. As a parent, you might wonder when and how long you can have your child on your policy. Here are some of the factors that determine whether your child needs their own coverage.
Most insurance companies will let you include a child who still lives with you. For example, if your 23-year-old child lives in your basement, you can still have them in your policy. However, children who have left home have to get their own coverage.
The rationale is that those who have moved into their own houses are financially independent and should buy separate coverage. Most insurance companies make exceptions for college students who come home during vacation.
Still on the issue of financial independence, kids who own homes also need independent insurance coverage. Many insurance companies make distinctions between those who move into rental homes and those who own their homes. Those who own their homes will have to buy individual car insurance.
Car ownership also comes into play because you can only buy insurance coverage for cars you own. Thus, you have to insure the cars whose titles are in your name. Your child can insure the cars whose titles are in their name.
Note that it is a crime (fraud) to lie about the true owner (and hence the primary driver) of a car. Thus, don't register your child's car in your name and claim you are the primary driver. The insurance company can easily cancel your coverage if it finds out about the fraud.
If your child is a minor, then you may have no option but to have them on your policy. In most states, your child can only buy insurance coverage for their car if they own the car. However, your child cannot have their name on their car's title if they are under age (below 18). Thus, you have to keep your child on your policy until they become an adult and can register a car under their name.
Marital status is one of the most common ways society gauges financial independence, and insurance companies agree. Many insurance companies will now allow you to cover married children, even if you have proof that the couple is financially dependent on you.
Having your child on your policy will give them a solid coverage history that may translate to good rates when the child gets their separate coverage. Consult an auto insurance agent before adding or removing your child from your insurance policy.
For more information, contact a professional who provides auto insurance.