How to Get Affordable Car Insurance Under Parent’s Name 

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Affordable Car Insurance for Teens Under a Parent’s Policy

For young drivers, especially teenagers, auto insurance is often one of the first significant expenses they face. With rising insurance rates for drivers under 20, many teens struggle to afford coverage alongside car payments. A cost-effective solution is to secure car insurance under a parent’s name, which can save hundreds or even thousands of dollars annually.

What Does Car Insurance Under a Parent’s Name Mean?

When a car insurance policy is under a parent’s name, the parent or guardian is listed as the primary policyholder, while the teen is added as a secondary driver. This arrangement is typically more affordable than a standalone policy for a young driver, as insurance companies consider teens higher-risk due to their limited driving experience.

However, there are trade-offs. If a teen causes an at-fault accident, the parent’s insurance premiums may increase significantly. This risk is a key consideration for families opting for this approach.

Teen driving a car while using a phone, with text overlay promoting cheap car insurance under a parent's name and savings on premiums.

Teens can save big on premiums by getting car insurance under a parent’s name. Learn how to lower your rates with tips from Loyainsurance.org.

Is It a Smart Choice for Young Drivers?

Whether car insurance under a parent’s name is the right choice depends on individual circumstances, but cost savings are a major factor. For many teens, the difference between affording insurance or not hinges on being added to a parent’s policy. Insurance for teens can cost two to three times more than for drivers over 30, making this option appealing.

Advantages of Adding a Teen to a Parent’s Policy

Adding a teen to a parent’s insurance policy offers several benefits:

  • Significant Cost Savings: Teens can benefit from their parents’ lower rates. For example, insuring a 2018 Ford Mustang with comprehensive coverage might cost a teen $400–$500 monthly on their own but only $250–$350 when added to a parent’s policy.
  • Access to Discounts: Teens living at home may qualify for discounts like the good student discount (e.g., for maintaining a 3.5 GPA) or a discount for completing a defensive driving course, which can reduce premiums by about 10%.
  • Improved Safety: Defensive driving courses, often available online for as little as $25, teach valuable skills that enhance road safety and may lower insurance costs.

Downsides to Consider

While cost-effective, this approach has potential drawbacks:

  1. Limited Control: Since the policy is in the parent’s name, they make key decisions about coverage, limits, and deductibles, which may not align with the teen’s preferences.
  2. Impact on Parents’ Rates: An accident caused by the teen could raise the parent’s premiums, as the incident is recorded under their policy.

Responsible driving can mitigate these risks, ensuring the arrangement remains beneficial for both parties.

Cheapest Insurance Companies for Teens on a Parent’s Policy

Teens face higher insurance rates than any other age group, but some insurers offer competitive rates for those added to a parent’s policy. Below are average annual comprehensive coverage rates for drivers aged 16–19 in 2025, based on recent industry data:

Insurance Company Average Annual Rate
Erie $4,120
Geico $4,450
Nationwide $4,500
Progressive $5,050
Travelers $5,200

Note: Rates vary by location, driving history, and vehicle type. Always compare quotes for accurate pricing.

Final Takeaways

Opting for car insurance under a parent’s name is often a practical choice for young drivers facing high premiums. By leveraging parental policies and discounts, teens can save significantly while gaining valuable driving experience. However, families should weigh the potential risks, such as premium increases after accidents, and ensure teens drive responsibly.

To find the best rates, compare at least 10 quotes from insurers by entering your ZIP code online. This approach ensures you secure the most affordable coverage tailored to your needs.