Should you stay on your parents' policy, or should you buy your own? Here are some pros and cons to help you decide what's best for you.
Staying on your parent's policy
- Your parents can get lower prices that usually aren't available to you, for things like owning a home, being married and having an established credit history.
- Most insurance companies give discounts for multiple cars on one policy, which your parents are more likely to have.
- Insurance companies determine rates based on the records of all drivers in the household, so bad driving records are balanced by better driving records when people are rated as a group.
- You don't have to deal with quoting and buying a policy, or having sole responsibility for paying the bills.
- You might get more extensive coverage if your parents have higher limits because your parents are willing to pay for it.
- You have to pay your parents money for your share of the insurance, and they will probably get cranky at how high teen rates can be.
- If your mom or dad has a fancy car like a Corvette or a Lexus, their rates could be higher because you have to be insured for access to that car.
Buying your own policy
- You're on your own — you don't have to answer to anyone, because you're paying for your own policy.
- You can buy only the coverages you think you need, without paying for the kind of coverages your parents want.
- You get to learn a lot about financial responsibility, which will put you ahead of most of your friends. It will probably impress your parents, too, and you never know when those points will come in handy.
- You're responsible for making payments. If you don't pay them, you might be canceled. And driving without insurance is a bad thing.
- Some companies won't sell you a policy if you're under 18, are a first time buyer, or have any accidents or tickets.
- If you're not on your parents' policy, you may not be able to borrow their nicer car for a special occasion.
- Because you won't be benefiting from your parents' pricing, you might pay a lot more.