Should I Stay on My Parents Car Insurance

When Bobby Lee turned 27, his parents' car insurance company required him to be taken off their plan. Lee was completely unaware and was forced off unexpectedly.

By no means was Lee a freeloader. He was on his parents' plan as the premium for his car's policy was cheaper than if he were to get a separate policy on his own. He just pitched in with whatever his portion of the total cost was.

After all, car insurance is so expensive — especially for younger drivers — that being part of a parent's policy in a handy way to cut costs.

Good things can't last forever, though. Like Lee you could be facing the prospect of moving off your parents car insurance.

Here's a guide to the situations where you'll need to switch to your own insurance as well as some tips on how to save once you're shopping.

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How long can I stay on my parents' car insurance?

It depends. While Lee's situation was an unusual one, unlike other types of insurance, like health insurance, there's usually no mandated cutoff age for kids to get off their parents' car insurance.

Yes, you can be 40 and still live at home and stay on your folks' policy. According to the Pew Research Center, it's becoming more common for young adults to live with their parents instead of living on their own. Among 25- to 29-year olds, over one third were living with their parents.

Can I stay on my parents' car insurance if I move out?

Strictly speaking you are supposed to get your own policy when you move out — assuming you aren't away at college. In practice, the transition point from yourparents'car insurancepolicy to your own policy is a gray area.

Some insurers have greater flexibility or acceptance of young adultsstaying  on parent plans a bit longer. If you're considered a dependent, you can stay on your parents' car insurance. Insurance companies may define "dependent" in slightly different ways.

Usually, you're considered a dependent if you attend college and live at home, or at least part-time (i.e., during summer and winter breaks) or drive a car that your parent owns and insure.

But in the case that you still live at home and buy a car, if you are considered the vehicle owner, then you'll probably need to purchase your own car insurance.

Can't I just pretend I still live with my parents?

While the auto insurance carrier doesn't know that you've moved out of your parents' place until you've informed them if they find out after you get into an accident, then the insurance company may deny your claim or cancel coverage altogether—and everyone else on the group policy. So follow the law and get on your own plan when you move.

Bottom line: It's illegal to drive without car insurance.

Here's how to figure out what types of insurance you'll need, and prepare to get off your parents' car insurance before you're required to:

Shopping for your own insurance

Forced to start shopping for his own insurance, Lee quickly found himself falling into a rabbit hole.

His search expanded to getting quotes from 28 different insurance companies. Each of them had different coverage levels and protections.

He also found that some companies were still stuck in the dark ages. There were old school web form applications, lack of instant quote calculators, a requirement to call into a sales hotline, for starters. After many frustrating moments, Lee finally landed on a company and coverage level that worked for his car and situation.

If you're moving out of your parents' place and need to get your own car insurance, you'll want to start shopping around for car insurance now. That way you won't be stuck without insurance, and in turn, aren't able to drive your car.

What type of insurance will you need?

In the scenario that you'll need to move off your parents' insurance, and purchase your own policy, you'll need certain types of car insurance.

First things first. All states in the U.S. require all drivers to have:

Bodily injury liability. Pays for injuries you cause to others;

Property damage liability. Covers damage to other peoples' cars, objects or structures your car hits;

And depending on which state you live in, you may need to have:

Uninsured motorist coverage. Reimburses you if you get hit by an uninsured or hit-and-run driver.

Underinsured motorist coverage. Covers you if you get hit by a driver who doesn't have adequate insurance

Personal injury protection (PIP). This is available in "no-fault" states, meaning coverage will kick in no matter who was at fault. Covers injuries for you and any passengers, and can also cover lost wages and funeral costs.

And if you're buying a car on your own, and are taking out a loan, you're required to have:

Collision insurance. Pays for damage to your car in the case of a collision with another car, object or pothole, or if it flips over.

Comprehensive insurance. Covers damage to your car caused by something other than a collision. For instance, from hail, flood, a fire, or an animal.

Since you're moving, your premiums may change depending on your new location. Plus, the types of insurance you'll need may change as well. You may need additional types of insurance, or you may need less.

Every state has its own laws and minimum requirements when it comes to car insurance. If you're unsure about how much coverage you should get, always get more than the state minimum requirements.

State minimums will give you cheaper premiums, but it almost certainly won't be enough to cover damages if you get into a car accident.

How will the cost of my insurance premium change?

Being on your parents' car insurance is pretty sweet financially. Car insurance that is bundled with other drivers typically qualify for a group discount and are generally less expensive than purchasing a policy individually.

So if you're moving out and need to get off your parents' insurance, expect to pay more.

Other factors that affect your insurance rates include the type of car you drive, the number of miles you put on your car, your driving record, credit history, and your age.

How do I get started shopping for my own policy?

It's a good idea to start your search for a new policy before you get booted off your parents' plan. In fact, the sooner, the better.

To get a jump on your hunt for a policy:

• Talk to your parents' insurance company and see if they offer coverage in the area you'll be moving to.
• See if you'll need to tweak your coverage. For instance, some states require personal injury protection (PIP).
• Will you be adding a new roommate or a partner to your car insurance policy? If so, check to see how that will affect your premium.

Remember: it's important to maintain coverage when you do switch car insurance. You absolutely should not have a lapse in coverage, even for a short amount of time.

While the penalties for driving without insurance vary by state, they can be severe. You could have your driver's license suspended, receive a ticket for a no-insurance violation, pay hefty fines, or worse, send your insurance premiums skyrocketing.

How can you save on insurance?

By hunting for discounts, you can save on your premium. Here are some ways to save:

• Good student discount. If you're still in school and get good grades, you could be eligible for a discount on your car insurance.
• Being a member of an organization or being employed at a company that offers group discounts.
• Ask for a home and auto insurance bundle.
• Seeking out a vehicle with good safety technology or anti-theft devices.

But one of the best ways to save on car insurance is to keep shopping around. There's plenty of competition for your auto insurance dollars so it could pay well to shop around and find a better deal. This doesn't have to be time-consuming experience it used to be.

Should I Stay on My Parents Car Insurance

Source: https://cover.com/blog/can-i-stay-on-my-parents-car-insurance-if-i-move-out/

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