• Should You Keep Your Child on Your Auto Insurance Policy?

    Should You Keep Your Child on Your Auto Insurance Policy? July 19, 2016

    Now that your child has graduated high school and is heading to college, as their parent you have another decision to make: let them stay on your auto insurance policy, or help them get their own.

    One stipulation that could make this choice easy is if the vehicle is not in your name. If that’s the case, your child may not be able to keep the car on your policy. Most insurance contracts require that the named insured or spouse be on the title- or leaseholder agreement of the vehicle.

    If the above isn’t an issue, then there are two situations you, as a parent, should evaluate:

    • If your child is no longer a permanent resident of your household, they don’t meet the definition of a “family member” by the policy contract. “Family members” must reside at the insured’s primary address the majority of the time. If your child has their own primary residence, then your policy’s coverage doesn’t extend to them.
    • If your child is attending school and living in a dorm or apartment, that residency is considered temporary and allows them to remain on your auto policy—even in another state. However, if your child is going to be over 100 miles from home, you might want to consider keeping the car with you. If your child would only drive when home on breaks you may receive additional premium discounts.

    Should you agree to keep your child on your auto insurance policy, they will benefit from the following:

    • Later on, when your child gets their own policy, they will do so already having an established history of insurance coverage. That can assist in showing their new carrier that they are less of an insurance risk. Less risk equals lower insurance rates, so having an established history with a good driving record is important for your child’s future independent insurance policy.
    • Should you choose to have your child reimburse you for their portion of the auto insurance premium, they will save money as a result of your discounts for policy longevity, multiple vehicles, or multiple policies—benefits they may not have on their own.

    While keeping your child on your car insurance policy will benefit them in the ways above, it does require good driving choices. Their mistakes will have consequences for you. For example, your child’s car accidents—whether they’re at fault or not—can mark your policy as being high-risk and raise your insurance premiums. Even worse, if your child is caught driving under the influence, it could result in your insurance carrier dropping your coverage. That will require you to get new insurance quickly and possibly pay higher premiums with the new carrier for having been dropped for a DUI.

    We understand that the first year of your child’s college experience can sometimes be uncertain in many ways. If you would like to run through the possibilities of student housing and other considerations that could impact your child’s auto insurance coverage, call Brunswick Companies today at 800-686-8080 to speak to one of our Personal Insurance experts. They can help you determine the best auto insurance policy for you and your child.