Should a Child Be on the Parent’s Auto Insurance Policy?

As teens reach the age where they can get a driver’s license, parents usually don’t question the fact that they’ll need to hand their kids the keys to the family car once in a while—after all, being able to drive is a skill teens will rely on often as adults. Letting kids drive usually prompts parents to wonder whether if they need to add children to auto insurance policies, however. The answer isn’t always the same for everyone.

Standard Protocol and Fraud

Insurance companies usually want you to include all licensed drivers who live at your home on your policy as a matter of standard. The reason is that, practically speaking, most family members hand the keys over to each other out of convenience. The more family members drive your vehicles, the greater their accident risk is, simply because they get on the road more often.

Insurance companies want to be properly compensated for taking on this increased risk, but if they don’t know everyone who is licensed in your family, it’s very difficult for them to give you an appropriate premium rate. As a result, if you purposely aren’t honest about everyone who could be driving regularly and get a subsequently lower price, it’s seen as fraud. From this standpoint, your child likely will need to go on your policy, unless you are willing to use what is known as a “named exclusion” – this option declares that you willingly exempt the named individual from coverage.

When setting up a policy, insurance agents also look at whether your child already has a vehicle and insurance of his own. If he doesn’t, then the odds that he’ll look to your vehicle are much greater, and putting him on the policy makes sense. Frequency of use also matters, however. Some companies include those you give permission to drive the vehicle in their definition of an “insured person,” so if this is the case for you and your child drives your car only once in blue moon, it isn’t always necessary to add him, depending on whether he’s currently living at your home.

Major Advantages: Extended Protection and Lower Later Rates

Insurance agents usually recommend putting your child on your policy not only because it protects you from accusations of fraud, but also because it extends the protection your child will have in the event of an accident. If he is not on your policy, for instance, he is covered only in the vehicles you own. If you include him, however, he is also usually covered when he drives or rides in someone else’s vehicles. This coverage is especially important when it comes to covering the costs of medical treatment, which can far exceed the price of car repairs or replacement.

Putting your child on your policy also allows your child to show later on that he’s already had some auto insurance coverage. This coverage history often qualifies him for a reduced premium rate when he goes to get his own policy. Insurance often is much more affordable as a result, which matters a lot for young people who often have fairly limited incomes and other expenses such as education to consider.

Major Disadvantage: Higher Premiums

Many parents want to avoid putting a child on their auto insurance policy simply because they know it will jack up the amount required in premiums. Statistically, however, it’s no secret why insurance companies ask you to shell out some big bucks when you add a child to your policy.

Studies have shown that teenagers are much more likely to get in an accident, which is largely due to their lack of experience on the road. Insurance companies offset the increased risk that they’ll need to pay out on child-inclusive policies by having clients pay higher premiums. When you add your child to your policy, you should be ready for this hike in price and understand that, as unfortunate as it is for your wallet, it’s simply a matter of good business for your insurer.

The Bottom Line

Generally speaking, you should add your child to your insurance policy if your home is his legal address and he lives with you, he will drive the vehicle frequently and he doesn’t have a set of insured wheels of his own to use. This will make your premiums higher in most cases, but these premiums are usually worth it for the extended protection and possibility for lower later rates they offer.


Frazer, C. (2012). Does my auto insurance cover others who drive my car? Autoinsurancequotes.
Insurance Providers. (n.d.) If your child only drives occasionally do you have to add them to your insurance policy? Insurance Providers.

Wanda Thibodeaux   By: Wanda Marie Thibodeaux