If you ever question when the appropriate time is to make you teen get his or her own auto insurance policy, you’re not alone. You want to choose an appropriate time to ensure your rates level out, and you also want to ensure the cost of auto insurance for your teen doesn’t skyrocket once they apply for a policy in their name. So, when's the right time to remove them?
Paying for Auto Insurance for Your Teen
If you plan on leaving your child on your policy, there should be some reasons why you're choosing to do so. Some reasons parents might consider leaving their child on their auto insurance policy include:
- They are a regular driver
- They are a primary driver
- They are going to school and commute to/from school in their vehicle
- They're building their driving record
- It's saving you (good student discounts, bundle policy rates, etc.).
Once you're paying premiums and you don't have to, it might be time to let them get their policy insurance, rather than remain on your policy for much longer.
“When you remove a youthful driver from the family policy, you reduce the probability of a claim for property damage, first-party, and third-party injuries and other liabilities that may result from the accident,” says Robert Hartwig, Professor, University of South Carolina. “Once the youthful driver is taken off the insurance, the premium for the family policy will decline considerably, as will the premium for the parent’s excess liability or umbrella policy offering added protections on top of the car insurance.”
Removing Your Teen from Your Policy
If your child is age 25 or older, this is a significant sign it's time to remove them from your policy. In fact, in most states, it's the law that drivers who are 25 or older need their own insurance policies. If your child has a good driving record, no accidents, and is a safe driver, it's also a good idea to have them removed from your policy before then. Doing this allows them to get discounted, student rates and allows you to minimize your policy rates. If your child lives at home and drives your car, you can keep them on your policy as long as you'd like. If, however, they're in school and away from home, it might be beneficial to take them off your policy.
There's no cut-and-dry reasoning behind taking teenagers off, or leaving them on, your policy. However, as a parent, you have to weigh your options, know your rates, and know when it's best to cut ties. If your child is old enough, has a steady driving record, and isn't living with you full time, these are clear-cut indicators it might be time to set yourself free of the burden of paying their policy rates.