How to save by adding kids to parents’ car insurance

Insuring a household together comes with steep discounts. But keeping a kid on your car insurance policy when they’re not eligible puts you at risk for a denied claim. Get to know your options when it’s time to grow out of household car insurance — including when kids need to come off, and the caveats that come with specific insurers.

How long can kids stay on their parents’ car insurance?

There’s no specific cutoff age for children to remain on their parents’ car insurance. In fact, they can stay on the policy even if they’re no longer living at home, as might be the case if they attend college or university far away.

The main factor in determining if a child can be on an auto insurance policy comes down to who owns the title of the vehicle they’re driving. If the child owns the title of a vehicle outright, then most insurance companies want that vehicle insured independently of a family or household policy.

Related: Car insurance in Canada

Do kids need insurance to drive their parents’ car?

Yes. Anyone who intends to drive the family car regularly must be registered on the insurance policy for that car, even if they won’t be driving a lot. No matter the age of the child, they need to be listed as a driver of the vehicle to legally get behind its wheel.

What if your child is a new driver with a beginner-class license?

Depending on where you live, your child might not need to be added to your insurance if he or she is a beginner driver. For example, in Ontario, children don’t need to be added to your policy until they have a G2 license, which can be obtained 8-12 months after earning their G1 licenses. Check with your provincial or territorial Ministry of Transportation to learn more about insurance requirements for new drivers.

What if your child doesn’t drive your car very often?

Generally, people who drive your car need to be on its insurance policy, but there is an exception for “incidental” drivers. These are people who don’t use your car regularly and might only get behind the wheel once every few months or only in unpredictable, exceptional circumstances.

For instance, if your child uses your car to run errands, commute to school, drive to soccer practice or attend church every week, then he or she needs to be added to your policy as a secondary driver (also called an occasional driver). But if your child only borrows your car once every few months for one-off reasons like picking up a friend from the airport or because his or her car is in the shop, then that counts as “incidental” driving which doesn’t necessarily require insurance registration.

Note that you as the vehicle owner (or primary driver) must still have auto insurance in your name even if you don’t drive your own vehicle very often.

How to save money when adding a teenage driver

We all know adding a teen driver to the car insurance policy is going to cause an increase in the premium. But there are ways to cut down on costs when the time comes. The following discounts might be available to you and your teenage driver:

• Good grade discount. Students may get a discount for maintaining good grades during high school, college or university or for being a member of an academic honour society.
• Anti-theft device discount. Purchasing an anti-theft device will help to lower insurance costs.
• Resident student discount. As discussed above, if your teen driver is away at school and won’t be bringing a car on campus, you could be eligible for a discount.
• Vehicle selection. The type of car your teen drives will affect the cost of insurance. Purchasing a moderately priced car with great safety ratings and a low theft rate will help moderate costs.
• Driver’s education or safety classes. Providing proof that your child has completed a driver’s ed course, a skid-control class or some other form of driver education will lessen the risk they pose to insurers and may land you a lower rate.

Finder survey: What is the typical annual car insurance premium for Canadians of different ages?

Related: Cheap car insurance

When do insurance rates go down for young drivers?

Insurance rates tend to go down around age 25. Statistically, drivers from 25 to 65 are much less likely to get in an accident than drivers outside of this age range. Drivers under 21 and senior drivers tend to see higher premiums.

The specific age that your child’s insurance policy decreases varies by provider though. So be sure to confirm with your provider when you might see your child’s rates go down.

Can kids stay on parents’ car insurance if they have their own cars?

Yes. There is no limit to the number of insurance policies on which a person can be listed. If a child lives at home, it could be wise for his or her parents to be added to the child’s policy and vice versa if they will be using each other’s vehicles. If the child will be driving her own car the most, it could still be necessary to remain on her parents’ policy if she intends to use their vehicle every so often as well.

Some insurers could consider your kid’s car a household vehicle and allow it to be covered under a larger umbrella policy. Confirm with your insurer how this specific situation is handled.

Can teens stay on parents’ car insurance after moving out?

It depends on how the child lists their permanent residence as well as your insurance provider’s policies:

• Your child has their own place.There is no law prohibiting you from keeping children on your car insurance policy if they permanently move away from home. But insurance providers may have rules against this, so you’ll need to check with your provider to find out for sure.
• Your child comes home for breaks. If your kid is currently in college and still uses your address as their permanent address, they can typically stay on the household policy.

To save money on your policy, look into whether your provider offers occasional driver discounts if your post-secondary student doesn’t drive while at school.

Leaving the car home while at college or university

Taking the car to college or university might seem like an obvious step in heading off to school, but there are several perks to not having a car on campus. Consider these benefits:

• Safety. Around one-third of deaths that occur between the ages of 15 and 19 are reportedly due to car crashes. And more drivers in their 20s end up being injured or killed in car crashes than any other age group. Leaving the car at home could help keep your kid safe.
• Discounts. You’ll find that many of the big car insurance providers offer a resident student discount for post-secondary students who live away from home and won’t be driving while away at school.
• Parking. Parking on college campuses can be hard to find and expensive. Not having a car eliminates this hassle.
• Drinking and driving. Without a car on campus, the temptation to drink and drive is eliminated.

Can a child stay on their parents’ car insurance after getting married?

No. Most car insurance companies consider marriage a clear break from any parents. This kind of financial independence will likely require your child to start a new insurance policy with their spouse, especially if a move out of the family home comes with the marriage.

If your child still lives at home, you might find exceptions. If they’re still a member of the household and frequently drive a vehicle owned by a parent, they might still need to be listed as a driver on your household policy. This doesn’t mean they won’t also have to purchase their own policy, so confirm with your insurer how it handles this situation.

What if the teen’s parents are divorced?

How to handle your teen’s car insurance will vary by your specific situation and your insurance provider’s rules. But here are some general guidelines:

• Joint custody. If you and your ex share joint custody of your child and the child’s time is split evenly between each parent, you will most likely need to put your teen driver on your and your ex’s car insurance policies.
• Primary custody. If you have primary custody of your teen, you’ll need to add them to your policy. If you’re not the parent with primary custody and your teen rarely drives your vehicle, you might not need to add them to your policy. But check with your provider to make sure you have proper coverage.
• Your teen has their own car. If your young driver has their own car, you will save money by adding their car to your policy rather than taking out a separate policy. Each parent should talk to their provider about adding your teen’s car to their policy to find out which offers the best deal.
• Single parents. If you’re a single parent, you’ll need to put your teen driver on your policy if they intent to drive your car. Insurance premiums tend to be higher for people who aren’t married, so it’s worth shopping around for the best deal.

The best way to handle car insurance for a family

If you’re looking to add one or more teen drivers to your family’s car insurance policy, you’ll save the most by keeping any cars in your name. Taking out an insurance policy for your car and adding your teen as a driver generally costs a lot less than adding a car in a teen’s name.

If your teen has their own car, try to have them listed as primary driver on the cheapest car to save money. And if they’ll just be borrowing your car from time to time, make sure your insurer lists them as a secondary driver.

Which family cars are good for sharing with teen drivers?

If you’ve got a teen driver in the house who will be sharing the family car, there are a few things to consider when making the big purchase of a new car. Is the car safe? Is it cheap to insure?

Related: Car safety ratings guide

Cars that typically cost less to insure

Cars with good safety ratings for families and teen drivers

Can I list myself as the primary driver on my teen’s car?

No. Naming another insured driver as the primary driver, also known as fronting, can lead to denied claims down the line.

And even if you try it, your insurance company is going to have questions about why you’re driving multiple cars and other insured drivers aren’t driving at all. As a general rule, insurers expect one car per insured driver in multicar households.

Bottom line

At the end of the day, several factors affect whether a child can remain on a parent’s car insurance policy. Ultimately, every insurance company has its own policies, so check with yours to learn how to keep them on your policy. And compare car insurance coverage options to see if you’re getting the best deal you can get.

Frequently asked questions

• Do I need to get insurance for my kid if she's just going to drive the family car?

  Yes and no. Your daughter won’t need her own separate insurance, but you will need to add her to your policy if she will be driving your car on a regular basis.

• Can my college or university student stay on our insurance while away at school?

  Yes, most insurance providers allow post-secondary students to remain on their parents’ car insurance policies. Check with your specific provider to find out for sure.

• My adult child has moved back in. Can I put them on our policy?

  Yes, that’s your choice. But make sure you understand the impact this will have on your premium such as a higher rate, which could grow higher still if he or she gets into an accident. Make sure your adult child fully understands the impact his or her driving record can have on your insurance.