Car Insurance: When Should Your Kids Have Their Own?

I was discussing a policy with a friend and client of mine who lives in Austin last week. Their oldest son, is the same age as my youngest son (23) and they used to play soccer together. Both of them appear to have survived my coaching! We were discussing what our adult kids are doing and catching up.

My friend’s son graduated from Texas A&M University and moved to Dallas to begin working with a company in the Las Colinas area. As the mom and I discussed the policy, I asked her how long she planned to leave her son on their car insurance policy. She and her husband were thinking about “encouraging” him to get his own policy now that he’s on his own. In response, I asked her if she’d like to know what I recommend all my parents who are facing the same decision.

There is no “right” age for an adult child to get their own car insurance, however, there are some factors that tend to guide this decision.

  • Where the adult child lives
  • Financial ability
  • Age

If, as in the case of my friends, the newly independent adult child lives in the same state, they can leave them on their policy. The only change to the car insurance policy needed is to change the garaging address of the car the adult child has to their new address. In my friend’s case, their son’s garaging address would be Dallas while the garaging address for their cars will be Austin.

If the child has moved out of state, then I recommend they go ahead and secure their own car insurance with an agent in their new home town. The reason for this is that they are establishing their residency there which usually includes registering the vehicle in their name in the new state.

The other question I discuss with parents is the adult child’s financial ability to pay for their own car insurance. Launching out on your own requires funds to secure an apartment, set up house, and in some cases, begin the process of paying off student loans. It may be financially helpful to delay requesting a son or daughter to get their own policy until a later date when they have fully transitioned to paying their own bills and are able to manage a budget. This is dependent though on their remaining in state.

Most insurance companies in Texas don’t recognize a man or woman as an adult until they reach the age of 25. This is usually the age where we see a significant decrease in the car insurance rate. When the adult child lives in the same state, and the parents are willing, I recommend they leave their son or daughter on their policy until they turn 25. This keeps the adult child’s premium lower as they are able to receive the multi-car discount and the lower rate the adult may have due to their driving experience.

What do you think? Share your thoughts, suggestions, and questions with me in the comments section of our blog or on our Facebook and Google + pages. I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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