Benefits Of Using Your Parents' Car Insurance, And When To Buy Separate Coverage

Children can enjoy a variety of benefits when they have coverage under their parents' policies. However, there comes a time when a child has to move out of their parents' policy and buy separate coverage.

Benefits of Staying On Parents Policy

Most children find it more beneficial to stay on their parents' policy as long as possible rather than buy their separate coverage. Here are some of the specific advantages of staying on your parents' policy.

Avoid Coverage Gap

Insurance companies like to deal with drivers with solid insurance histories. That kind of history shows that you are reliable and dependable, which means you are a low-risk client. In fact, those with coverage gaps in their insurance histories are likely to pay higher rates than those without gaps.

Most teenagers or young adults don't have good insurance histories, which is one of the reasons their rates are high. Joining your parents' policy, even if you don't have a dedicated car, presents you with the opportunity to build your insurance history. That way you will not incur expensive rates when you buy a car and insure it on your own.

Benefit from Parent's Rates

Another advantage of joining your parent's history is that you will enjoy better rates than you would if you had a separate policy. Your young age, your potentially poor or nonexistent credit rating, and your relative lack of driving experience all mean you are more of a risk to insurance companies than your parents are. When you stay on your parents' policy, you benefit from their better insurance rates.

When to Get Your Own Policy

Despite the benefits of staying on your parents' policy, you can't do it forever. Although there is no specific age at which you must buy a separate policy, there are circumstances under which insurance companies require you to get your own coverage. Here are some of the cases under which you should buy separate coverage.

You Move Out

Car insurance companies only allow a child who lives with their parents to be on the parents' policy. You need a separate policy when you move out of your parents' house permanently.

You Get Married

Most insurance companies require you to buy separate coverage if you get married. This is because you will be an independent adult when you get married, and only those who depend on their parents should be on their parents' policy.

You Get Your Own Car

You can only be on your parents' policy if your parents own the car you drive. However, if your car's title bears your name, then you should buy your own separate insurance policy too. In this case, however, you can enjoy slightly better rates if your family insures all the cars with one company and you get multi-car insurance discounts.

Contact a company like Affordable Insurance to learn more about auto insurance options near you.