Can I Be on My Parent’s Car Insurance If the Car is in My Name?

Can I Be on My Parent’s Car Insurance If the Car is in My Name?

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Everyone knows that car insurance is expensive. It’s tempting to go without it, but this can lead to even more expensive legal troubles if you’re caught driving without insurance.

For new drivers, such as teenagers and college students, it’s more affordable for the whole family if you remain on your parent’s insurance until you can afford your own. Insurance for 16- to 25-year-old drivers is more expensive than for any other age group, and parents usually have an established driving record that gives them lower rates.

A family can also receive discounts for covering another vehicle on the policy. But what if the car is in your name rather than that of your parents? Can you still cover it under their policy? Is it worthwhile to do so?

It Depends On Your Parents’ Policy

Every insurance policy is different. Some companies will allow coverage of a child’s vehicle. This keeps their company in the son or daughter’s mind when they start looking for their own insurance later down the line. Other companies will want the kid to purchase their own policy – at higher rates, of course.

The majority of insurance companies fall in the latter category. It simplifies things for the company for the vehicle being covered to belong to the policyholder. Again, every company and policy is different, so it’s best to contact your parents’ insurer or consult their policy for the specifics about what is and isn’t allowed.

You Can Sometimes Get Around a Policy That Doesn’t Allow Your Car to Be Covered

If you consult your parents’ policy and discover that it will not cover a vehicle in your name, you may think that your only option is to buy your own insurance. But there may be ways around this.

You could put your parents’ names on the title of the car. In this case, the car would then be in your parents’ names and they could easily add it to their insurance policy, snagging a nice multi-car discount in the process.

Or you could consider actually selling the car to your parents for an agreed-on price. They would then add it to their policy and allow you to drive it.

Why You May Want Your Own Policy

It’s not always a good idea to remain on your parents’ policy. If you have a loan or lease on the vehicle, having your own insurance may be required. The financing company will need proof of insurance from you, and they may not accept a policy that is in your parents’ name.

Always Check with Your Insurer About What is Possible and What Isn’t

The limits of what you can do will depend on your specific situation. Your parents’ insurance company may want you to get your own policy. If you decide to put your parents’ names on the title or sell the car to your parents, this gives them rights to the vehicle and if you have a dispute or something happens to your parents, you may lose access to the car.

You’ll need to keep in mind the requirements set by your financing company. In the end, only you can decide what is right for you, your family, and your car.

By checking with your parents’ insurer and your own financing company, as well as discussing the matter with your parents, you will ensure the best possible outcome for everyone involved.