Many people know that it is generally cheaper for parents to include their kids in their auto insurance policy. However, the arrangement cannot continue forever; there comes a time when the child is better off on a separate policy. Below are some of the circumstances under which you can take a child off your policy without any negative effects.
Auto insurance rates vary by state. Some states have better rates for teenagers than others. Some states don't even consider age to be a big deal when determining coverage rates. If your child or you move to such a state, then there is no harm in your child getting their own coverage. In fact, you might even lower your own rates if the child moves to a state with favorable rates and buys separate coverage.
Solid Insurance History
The top reason for including a child on your insurance policy is so the child can benefit from your solid insurance history. The arrangement is especially great if you have a good driving history and have been enjoying great rates for a long time. However, if your child learned to drive early and has been driving for a long time, they are likely to have a good insurance history in their early twenties. In such a case, the child can easily move to their own coverage without much risk.
Having an expensive car increases your auto coverage rates. Having a teenager on your driving policy also increases your rates. Having an expensive car (such as a luxury sports car) and including a young driver in your policy can send your rates through the roof. What is more, everyone on the same policy will be subjected to high rates. In such a case, it makes sense for the young driver to move to their own policy.
Financial Stability and Independence
Many parents let their kids stay on their auto insurance policies as long as the children are still dependent on them. This helps children to enjoy affordable rates and build a good insurance history. However, if a child is financially stable and independent, they won't suffer much if they buy their own policy. Say the child has graduated from college, started their first job, and moved out of their parents' home – such a child can afford to buy auto insurance independently of the parents.
Hopefully, you will be able to enjoy great coverage whether your child is on your policy or a separate one. Keep your auto insurance agent in the loop as far as your child's coverage is concerned, and speak to them if you have any questions about auto insurance coverage.