When should I drop my kids from my car insurance?

As summer approaches, caps and gowns are donned by high school and college graduates all over the country. Graduation time is a rite of passage, an acknowledgement of a benchmark of life being achieved, a closing of one chapter, and an opening of another. As a parent, one question being asked around this time is, how much will my child take on in the next chapter. As kids grow into adults, many parents find themselves tackling questions like, when does my child need to start paying their own bills? How much grown up responsibility should they take on at once? Along with that comes the inevitable question, When should I drop my kids from my car insurance?

When looking for the answer to that last question, the first step is determining exactly how long you can keep them on your insurance. The answer to that is, provided the right circumstances are met, forever. Yes, you read that right; if you wanted to, you could keep your kids on your car insurance for the rest of your life.

What are those circumstances? If your child lives with you and drives a car you own you can continue to insure them. If your child does not live with you, but regularly drives a car you own, you can also keep them on. For example, when your child goes off to college, they are no longer living under your roof; but if you send them to college with a car, as long as that car is in your name and your home is listed as their “permanent address,” they can stay on your policy. This is easy when they live in a dorm or an on campus apartment, but a little more difficult when they have signed a lease off campus. Some parents like to transfer the title to their child’s name, but that only complicates things where insurance is concerned.

Since age doesn’t necessarily factor into the equation, the next thing to look at has nothing to do with the car itself. One of the most important factors in determining if you should drop your child from your insurance is their job. Before transferring the title, or moving them off of your insurance, you will want to know that they can afford their own premium. If their salary barely covers rent and other expenses, you may want to keep them on your policy a little longer.

Once they are officially out of the house, living on their own, have a steady job, and have their own car (whether you transferred a title, or they outright bought it); then it is time for them to get their own policy. After they have their policy, you can drop them from yours. In fact, some insurers go out of their way to make it difficult to drop a driver from your policy without proof of new insurance.

While the time to drop your kids from your insurance may vary depending on circumstances, the thing you want to be absolutely certain of, is that it’s a one-time transfer. The last thing you want to see happen, is to prematurely remove them from your policy, have them miss a few payments on their premium, then they are left uninsured. In this instance, parents are left scrambling to re-add them to their policy, which can actually lead to some serious out of pocket expenses should anything go wrong.