When should I take my children off my insurance policy?

As adults, we may struggle from time to time to keep up with the steep rates that insurance providers charge us. So it is safe to assume that a teenager will most definitely struggle with keeping up with car insurance rates on their own. This is why most parents keep their children on their insurance policy until they are around their mid-to-late 20s. However, there does come a time when it is time to remove your children from your insurance policy.

Most parents do not know what age to drop their children off of their auto insurance policy. Deciding to keep your adult children on auto insurance is genuinely a challenging dilemma because you never want to put your kids in a difficult situation, no matter how old they are. Nevertheless, with the right guidance, parents can decide to remove or keep their children on their insurance policy with peace of mind. 

The Factors that Affect Your Decision

When your teenager got their license, you quickly became aware of all of the factors that played a role in your insurance rate increase when you had to add them to your policy. The only difference between now and then is that you probably had control over their actions because they still lived in your house.

Now, as they are an older young adult, they may be away at college or live independently, and you have less say about how they use their car and when they use it. People in their early 20s are understandably considered as a riskier driver because they are just starting to grow a sense of responsibility for their actions within the world as an adult. 

In worse cases, if you partook in overprotective parenting when they lived under your roof, they may be participating in many riskier activities because they are experiencing a sense of freedom. This increases the chances of them getting into car accidents or even receiving tickets, and both of these can result in your insurance rate spiking higher than what it was.

So when considering if you should remove your child from your insurance policy, it is vital first to evaluate their behavior. Of course, their financial stability is crucial to the decision you make. Still, their behavior is equally important because a poorly behaved young-adult may need to acquire their own insurance policy to comprehend better why being responsible is essential as an adult.

Rate Difference Between Teenage Boys and Girls

If the child on your insurance policy is a male, then another realization you had when he began driving is that insurance providers charge higher rates for teenage boys. An average teenage boy can expect to be charged 14 percent more for car insurance than a teenage girl will be charged.

The reason for this is because male teens have statistically been proven to be riskier drivers than their counterparts. When young adults reach the age of 25, their rates start to drop a little lower but before then, expect to pay more than what any other adult may be charged.

Unlike health insurance, where children can only remain on their parent's policy until they are 26 years old, there is no age cap for auto insurance. So if you are willing to keep your children on your policy longer, it is essential to keep in mind that insurance rates will not subside until they are older than 25.

Your Child's Level of Financial Maturity

As you can see, the decision to remove or keep your child on your insurance policy is one that can only be made by each set of parents and their family's specific situations. As mentioned earlier, their behavior plays a vital role in the decision-making process, but their current financial situation should be included in the process as well.

No parent wants to make a decision that will affect how hard or easy their children's life is, though at some point they have to start living independently. If your kid is going to school full time, has good behavior, and you can keep up with the insurance premiums, then, by all means, keep up the insurance policy and wait to remove your kid from the policy.

However, if your child is the opposite of what was stated above, is not in school, and has a source of income streaming in, then it may time to pull the plug and let them take on that responsibility. Alternatively, if you cannot keep up with the payments or your kid is unable to make payments by themselves, then you two should have a conversation about finding a way to split the cost for their portion of the premium. 

Whether that be 50/50 or 30/80, that is dependent on both your financial circumstances and the relationship you have. This can be an excellent opportunity to teach your kid how to manage family finances if you have not had that conversation yet. No matter what, though, try to avoid putting yourself in a situation that you cannot handle financially. 

Speak with Your Insurance Agent 

An alternative to removing your young adult children from your insurance policy is to speak with your insurance agent about how to get cheaper insurance rates or added discounts. This conversation is especially crucial to have if you had not inquired about discounts since you first added your kids to the insurance policy when they first started driving. 

Here are some common discounts that insurance providers offer:

• Away-from-home discounts
• Monitoring app or device discounts
• Multi-car discounts
• Good student discounts
• Defensive driving discount
• Accident-free and good driver discounts.
• Safe driver discount
• Savings for low mileage and usage
• Senior/mature driver discounts
• Military and federal employee discounts

The discounts may not be all that is offered by your specific insurance provider, so it is worth inquiring about. Who knows? Your insurer may even be willing to offer lower rates based on your being a loyal customer.

Imani Francies writes and researches for the auto insurance comparison site, BuyAutoInsurance.com. She earned a bachelor of arts in film and media and specializes in various forms of media marketing.