Weighing the Pros and Cons of Keeping Your Older Child on Your Car Insurance Policy

Father giving his son the keys to the car

If you’re a parent to a young adult, you may have wondered if you should keep them on your current policy or allow them to purchase their own separate policy when they purchase a new car. As a parent, you want nothing but the best for your child, but what is the best approach? The Good Hands Advice team has a list of pros and cons to help decide if it’s better to keep your child on your current car insurance policy or recommend they choose their own.

Potential Pros for Keeping Your Child on Your Policy:

Easy to Manage

  • It may be easier to modify or update your auto insurance policy if all family members are listed on it. This can include updating the home address of all the insured living in the same household or changing your coverage options. It can also be advantageous to have a dedicated agent who is familiar with the family’s car insurance coverage and can provide recommendations to suit your newly independent driver.

Save Money 

  • You may find that if your child has their own policy with another insurance company, the rates may be higher than if they were listed as a driver under your own policy.

Qualify for Car Insurance Discounts

  • Some insurers may offer a multi-policy discount or multi-vehicle discount for those who have multiple drivers or cars bonded to a single policy. If that is the case, you may want to speak with your insurance agent to see what discounts the family may be eligible for.

Annual Premiums for Children May Decrease After the Age of 25

  • There isn’t a set age limit as to when your child can remain on your policy. If your child is listed as an “occasional driver” (i.e., someone who is not the titleholder or primary driver of the vehicle) after they turn 25, there is often a rate reduction for occasional operators as they are no longer considered “underaged.”

Potential cons for keeping your child on your policy:

Your Premium May Increase if Your Child is Not the Owner of the Vehicle 

  • If you are the title owner of the vehicle, but not the principal driver, the car must be added to your car insurance policy – which may cause your premiums to increase.

You May be Held Liable in Any Incidents Involving the Vehicle they’re Driving 

  • If your child is driving a vehicle that technically belongs to you (as the titleholder), and they are deemed to be “at-fault” in a collision, your insurance may also be impacted.

Miss the Experience of Shopping for Their Own Insurance

  • Let’s face it, your child is not going to be on your insurance forever. As long as they’re driving, they will always need to insure their vehicle and they may benefit from the experience of choosing the coverage they need. So, be sure they speak with your family’s insurance agent. They are often familiar with your family’s insurance needs, history and can assist in answering any questions you or your child may have.

Be sure to speak with your insurance agent to see which option works best for you and your family. To find an agent nearest you visit www.allstate.ca.

Disclaimer: This information has been provided for your convenience only and should not be construed as providing legal or insurance advice.