The answer is dependent on whether you are the only owner of the title or not. If you are the only owner listed, you will have to purchase your separate policy.
If your parents are also listed as owners on the car’s title, you can have your car insured under their policy.
Unfortunately, car insurance rates for younger folks in on the high side. It doesn’t help that in this stage of life, you will be battling with low paying jobs and other responsibilities (mostly school-related)
Because of this, many youths will opt for insuring their vehicles under their parent’s policy. Some parents may offer to buy a new policy for their children and handle the premiums themselves.
As we mentioned earlier, if you are the only owner listed on the vehicle’s title, you have no choice other than to purchase a separate policy for yourself.
On the surface, it looks like a more expensive route, but in the future, it may turn out to be more cost-effective to maintain a separate policy from your parents.
There is also no rule prohibiting your parents from handling your insurance premiums because you are on a separate auto insurance policy.
Why Who Is Listed On The Title Matters
We assume there might be some confusion on why insurance companies are concerned with who is listed on the title of a car.
The concept of insurance is to indemnify the owner of a property in an unforeseen circumstance—for example, car theft, burglary, and fire outbreak.
We deduced that you could not insure something you do not own from the concept. In the case of auto insurance, if your car is involved in an accident, the insurance company will make payment to the owner of the car.
In a situation where the policyholder (your parents) is not the owner of the vehicle, the insurance company maintains the right to withhold payment. However, if your parents are listed on the car’s title, they become legal owners of the vehicle.
The reality of the matter is that only the property owner suffers a loss on it. If your parents are not listed as owners on the car’s title, the insurance company cannot pay them for a loss that is not theirs.
When Is It Necessary To Buy A Separate Insurance Policy
There is a high chance that your first car will be a gift from your parents, and they will be the listed owners on the title.
If you are still living with your parents, you don’t need to buy a separate policy. Instead, have your name added to their auto insurance policy, and you are good to go.
A general rule in insurance is that multiple drivers of a vehicle related to the policyholder and living together can fall under a single insurance policy.
However, this is only applicable when your parents are listed as owners of the car’s title. If they aren’t, you have to purchase a separate policy regardless of whether you live with them or not.
Remember, the insurance company can only make payments to parties with legal interest on a property, aka the owner.
We would advise you to explore your options by getting quotes from companies outside of your parent’s use.
Getting Car Insurance While In College/ University
Earlier, we pointed out that multiple drivers living together and related to the policyholder could share a single insurance policy. What happens when you live on campus?
It is possible to remain covered by your parent’s insurance policy even when you are away at college.
First, make sure that your permanent address is the same as your parents, and lastly, ensure they are listed as owners on the title of the car. These requirements align with the general rule that allows multiple drivers to share a policy.
Some companies offer a discount to students who do not take their cars to school. However, we should point out that you are expected to observe good driving practices during this period.
A bad driving record could cause the cost of maintaining the policy to skyrocket regardless of who owns the policy and driving the vehicle.
We must mention that the information on the vehicle registration should tally with what is on the vehicle insurance documents.
How Long Can I Stay On My Parent’s Policy?
It is natural to wonder if you can remain on your parent’s insurance policy once you are fully regarded as an adult.
Medical insurance policies have an age limit and require children to purchase a separate policy once they reach a certain age. However, this is not the case with auto insurance policies.
The restrictions on car insurance policies are concerned with who owns the car and where you live, not how old you are.
Your main concern should be determining whether there is any benefit to remaining on your parent’s policy- is it cheaper than maintaining a separate policy?
Auto-Insurance Rates For Young Drivers
Insurance rates for younger drivers are higher than that of older drivers. The reason for this is simple.
Younger and newer drivers are viewed as high risk by insurance companies; it doesn’t matter that you have a clean driving record at this point.
However, maintaining a good record well into adulthood will impact your insurance costs for the better as you get older.
The general benchmark age for auto-insurance rates to decrease is age 25. Your insurance company may begin to review your policy based on driving history by this time.
Conclusion
Whether you can insure a car under your parent’s policy is dependent on whether they are listed as an owner of the vehicle or not, and there are no age limitations on how long you can remain on their policy.
Even as a college student living on campus, it is possible to enjoy car insurance under your parent’s policy, and you may even enjoy some financial benefit for leaving the car at home instead of taking it with you to campus.
Getting a separate policy and joining your parent’s policy should depend on what option is cheaper.
Katherine Morrissey is the lead writer at InsuranceBlogX.com, specializing in life insurance and financial planning. With over 12 years of experience in the insurance industry, Katherine has a proven track record of helping individuals and families secure their financial future. She works as a Life Insurance Agent at Insurance Agents – USA and is a licensed insurance sales agent. Connect with Katherine on Facebook at @Katherine Morrissey and Instagram at @katherine56_morrissey for expert insights and updates.