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When should kids get their own car insurance?

This question is about Cheap Car Insurance

Anamarie Waite , Car Insurance Writer

@anamarie.waite • 01/21/20 This answer was first published on 01/21/20. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

Kids should get their own car insurance when they purchase and title their own car and no longer live at home. Although some insurance companies will let you add a vehicle not registered in your name to your policy, most will only allow cars titled in the name of the primary policyholder to be added.

If your child lives with you, it's assumed they have regular access to your vehicle, and most insurers will require them to be listed on your policy. As soon as your teen driver is licensed, you'll need to add them to your policy or prove to your insurer that they are either insured or permanently residing elsewhere. If you title a car in your child's name, your child will have to get their own policy. But you can still list them as a driver on your policy if they are living at home and will have access to your covered vehicles.

There is no set age at which you have to remove your child from your car insurance policy. They can remain on your policy indefinitely, as long as they live at your address and the title remains in your name. It is possible to exclude your child from your insurance policy, but that means your child has zero coverage if they get into an accident driving one of your cars. If your child has had multiple tickets, a license suspension or a DUI, your insurer may require you to exclude your child from your policy.

Having a young driver on your policy has drawbacks for you as the primary policyholder. The biggest disadvantage is that your child's driving habits become part of your insurance history, since your policy will pay for their claims. If your child gets into an accident, you will see premiums go up for everyone listed on the policy.

On the bright side, it is more cost-effective to add your child to your policy. Teenagers will get a more affordable rate if they are listed as a driver on a parent's policy than they would on their own policy. Plus, you're eligible for discounts your child might not be, like bundling with homeowner's coverage. Although car insurance for teens is always expensive, you may be eligible for additional discounts if your child has good grades, attends driver education courses, or takes a defensive driving class.

Answer Question

Cost of Car Insurance for a 25-Year-Old by Company

Company	Cost
USAA	$736
Geico	$770
Progressive	$773

To learn more, check out WalletHub's guide to the best car insurance for teens and young drivers .

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When does car insurance go down?

The cost of car insurance typically goes down the most between the ages of 18 and 19, when rates drop by about 25% on average. Car insurance premiums generally continue to go down each year until age 25, when rates begin to level off for the next few decades. When drivers turn 25 years old, they can expect a discount of about 14%. … read full answer

When Car Insurance Rates Go Down the Most

Age	Average Rate	Change from Previous Age
16	$3,343	0%
17	$2,752	-18%
18	$2,415	-12%
19	$1,812	-25%
20	$1,618	-11%
21	$1,250	-23%
22	$1,134	-9%
23	$1,053	-7%
24	$998	-5%
25	$862	-14%

Note: The table above shows average annual rates for minimum coverage across all 50 states.

Around middle age, rates may begin to creep back up. This is because middle-aged drivers tend to insure newer, nicer cars and begin to add their children to the policy, increasing the average rate for this age range overall. Individual rates also start to go up again between the ages of 65 and 75 because senior drivers have a higher risk of accidents than middle-aged drivers.

Why Age Affects Car Insurance

Age affects car insurance rates because it's an indicator of a driver's risk to an insurance company. Young drivers are statistically more likely to get into a car accident than older, more experienced drivers. As a result, they're considered high-risk and are more expensive to insure.

The risk for the insurer and the cost for the insured then generally decline as drivers age and gain experience. Once drivers pass the age of 65, however, their risk starts to go up again. Not only are senior drivers more likely to get into an accident than middle-aged drivers, but they're also more likely to be injured as a result.

States Where Age Does Not Affect Rates

Although most people in the U.S. will find their prices change according to this timeline, there are a few states in which insurers can't use age to determine your rate. In California, Hawaii, and Massachusetts, age won't have a direct effect on how much you pay for car insurance. Other factors will still have an impact, though. Your driving record, credit score, and marital status can all affect your final premium.

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How much is car insurance for an 18-year-old?

Car insurance for an 18-year-old costs $2,415 per year, on average, or $201 per month. Eighteen-year-old drivers pay more for car insurance than older, more experienced drivers because insurers consider them to be high-risk, meaning they're more likely to file a claim.

Because the cost of coverage for 18-year-olds is so high, it's important to shop around for multiple quotes before buying a policy. Some of the best car insurance companies for 18-year-old drivers are … read full answerTravelers , USAA and Mercury .

Cost of Car Insurance for an 18-Year-Old by Company

Company	Cost
Travelers	$1,347
USAA	$1,554
Mercury	$1,676

The exact cost of car insurance for an 18-year-old depends on a few factors , including their driving record, gender, and vehicle type. Additionally, whether an 18-year-old is buying their own policy or being added to their parents' policy makes a difference.

Adding an 18-year-old to an existing policy will raise the premium by an average of 140% to 160%. But even with the added cost, it's still a more cost-effective option than having the driver purchase their own policy.

To learn more, check out WalletHub's guide to the best car insurance for teens and young drivers .

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