How Long Can I Stay on My Parents’ Insurance?

27

The job market is tough. I still live in my parent’s basement. How long can I stay on my parents’ insurance?

Home Sweet Home

What is better than staying in the family home that you grew up in? You have great memories and know the sounds of the old house. You know where everything is located.

You might have personal belongings in the attic that you have not touched for years. The job market might not provide you with a livable wage or reason to leave your parent’s home.

Parent’s Home

When you first start out in the workforce, you might be paid minimum wage. You don’t have many expenses, so it does really not matter, right? Unfortunately, some of these low-wage jobs never really get much better.

Have you noticed how much prices have gone up? Your parents might be paid Cost Of Living Adjustments (COLAs) every year. This ensures that their salary purchasing power increases more than the rise in inflation does.

Unfortunately, many temporary jobs don’t have COLAs, so your minimum wage has less and less purchasing power, each year. You might be barely able to pay for gas, let alone car insurance. Who wouldn’t want to stay on their parent’s car insurance policy for as long as possible?

Parent’s Insurance

And unfortunately, the economy might not be getting better. More employers are hiring temporary workers, so they do not need to pay them benefits. You might believe it would be very difficult to get the same insurance coverage as your parent’s have.

And, that is probably true. When they were growing up, they were still given great job benefits. Their insurance may cover a lot of very important things for a very low price.

By having your parent as a co-signer or co-owner of your vehicle, you can increase the chances of being able to stay on their car insurance policy. Your parent is taking on a portion of risk.

Insurance Company Risk

Insurance companies base many of their decisions on risk. Since you are on your parent’s auto insurance policy, they probably pay some of your expenses too. Therefore, your risk (in the eyes of the insurance company) is based on their wealth, not yours.

Fortunately, you can stay on most parental car insurance policies for as long as you want. You might be designated as a “Covered Driver” on your parent’s car insurance policy. The premium for that is much lower than if you were a “Single Driver.”

There is also the auto insurance concept of a “Household.” It is assumed that members of the same household will drive each other’s vehicles, especially if the parents are senior citizens.

If you move out or get married, the car insurance company may not allow you to stay on your parent’s policy. Therefore, plan carefully and budget to pay insurance before moving out.