How to save by adding kids to parent’s car insurance

Some teenagers are more responsible than others. However, if someone’s under 21 and has recently passed their driving test, car insurance companies won’t take any chances that they’re the responsible type. Statistically, younger drivers are more likely (on average) to make a claim, and all young drivers are likely to be painted with this brush until they prove otherwise. This is tricky if they’ve only just passed their test. However, there are ways to lower car insurance premiums for teenagers. One of the main ones is for a parent to add their kids to their own car insurance. We explain why and how.

Can a parent add their child to their car insurance policy?

Yes. Whether their child is learning to drive or has just passed their test, parents can put them down as a “named driver” or “additional driver” on their car insurance policy. A parent can do this when they first take out their policy, or contact their insurer to add an additional driver mid-term – when a child passes their driving test, for example. The latter might incur an admin fee.

Is it worth adding a teen driver to a parent’s car insurance policy?

It’s certainly worth considering if a son or daughter living at home has just passed their driving test and wants regular access to their parent’s car. Adding them as a named driver may be cheaper than them taking out their own insurance policy (though not always).

But it’s not without its downsides. Importantly, if they’re a named driver, they must drive the car less than the person who’s listed as the main driver of the car (i.e. their parent).

Who are the main and named drivers on a car insurance policy, and why does it matter?

The main driver listed on a car insurance policy must be the person that uses the car the most. Any named drivers, such as sons or daughters, must drive the car less often.

If, in practice, it’s the other way round – unintentionally or deliberately – you could be guilty of a type of car insurance fraud called “fronting“. This is when a more experienced driver lists someone who is younger and higher risk as a named driver on their policy, when in reality they’re the one using the car the most. A mum or a dad might do this to lower the cost of their child’s car insurance premium, but it is illegal and can void your insurance.

If you’re found guilty of fronting, your insurer may also choose to add you to the Insurance Fraud Register, to which most insurers have access. This could mean that the cost of buying car insurance in the future is much higher. Some insurers may even refuse to cover you.

What are the risks of adding a young named driver to a parent’s car insurance policy?

Other than the risk of inadvertently falling foul of the laws around “fronting”, there are a couple of risks to be aware of.

• The parent’s premiums are likely to increase substantially, to cover the cost of adding a higher-risk driver to their policy.
• If a named driver is added to a policy part way through an insurance term, it will likely incur an amendment fee.
• If the young named driver has an accident, their parent will have to claim against their policy. This could wipe out some or all of the parent’s no-claims years and mean that underlying premiums rise at their next renewal.

How much does it cost to add a teenager to a parent’s car insurance?

Having a child as a named or additional driver will push insurance costs up for the parent. That’s because the insurance company knows that a higher risk driver will be using the car from time to time. However, depending on the details, it may be cheaper than a teenager taking out their own policy.

Worked example: How much could adding a young named driver cost?

We ran some quotes on behalf of a fictional driver, Mary – a 50-year-old teacher, Berkshire resident and Honda Jazz driver, who needs to renew her car insurance. She’s a safe driver with a clean driving record and 10 years of no-claims bonus, so we’re confident her premiums will be reasonable.

But there’s a snag. Mary’s 18-year-old daughter, Holly, has just passed her driving test, and is clamouring to be allowed behind the wheel unsupervised. With some trepidation, Mary agrees to look into it, but also asks Holly to get a quote to take out her own policy on Mary’s Honda. You can see the results in the table below.

*Black-box policy

Our example shows that adding a newly-qualified child to a parent’s policy is no small ask. In fact, in this case, it would be around £70 cheaper for Holly to take out her own policy on Mary’s Jazz than for Mary to add her as a named driver. This won’t always be the case, but it shows that it’s worth checking all your options before deciding on a specific route.

If a young named driver makes a claim, will their parent’s no-claims discount be affected?

Potentially. Named drivers are insured on the same policy, and under the same terms, as the main driver. This means the policyholder takes on responsibility for any claims they cause. So even if the named driver is responsible for an incident, it’s their parent (as the policyholder) that will need to make the claim.

Depending on whether their no claims bonus – and the conditions attached to their no claims bonus protection – is protected, this could wipe out some or all of their no claims years. Even if they don’t lose any of their no claims discount, they may still see their underlying premium rise when they come to renew.

How long can a child stay on their parent’s car insurance policy?

You can add anyone you like as a named driver on your car insurance policy, whatever their age and whether they’re related to you or not. As such, there’s no age limit or cut-off point for a parent listing their child as a named driver – provided that they don’t end up driving the car more than you. If they do, they’ll need to be listed as the main driver.

The real question is: How long should a kid stay on their parent’s car insurance policy? If, for example, they’re away for most of the year at university, there could be long periods when they’re not driving a car, but high premiums to cover them are still being paid. In these cases, it could be worth checking if buying temporary car insurance while they’re home for the holidays would be a cheaper option.

If a teen owns a car outright, can they stay on their parent’s car insurance policy?

If you’re the main user of a car (as is likely if you’re the owner), then you have to take out your own insurance policy, regardless of your age. So don’t assume that your parent’s policy will cover your own car just because you live at the same address.

However, it is possible to be insured to drive 2 cars at a time. Let’s say you have your own car, but still want to drive your parent’s car every now and then (perhaps it’s bigger and can fit more passengers in safely and comfortably). There’s technically nothing stopping you taking out your own policy for your own car but remaining as a named driver on your parent’s policy. Though if the cost of keeping you on as a named driver is high, it might not be worth it for very occasional use.

What are the alternatives to adding a child as a named driver?

If a young driver is the main driver of a car, regardless of whether they or their parents own it, they’ll need their own car insurance policy.

Even if they’re driving their parent’s car rather than their own, they can still take out their own insurance policy on it. It’s fine for different people to have different policies to drive the same car. This will usually work out pricier than adding them as a named driver. However, unlike adding them as a named driver, the parent’s premium won’t be affected and their no-claims bonus won’t be put at risk.

If a child only drives their parent’s car occasionally – for example, when they come home during university holidays – it might be worth them instead taking out temporary car insurance. This could give them coverage for anywhere between 1 hour and 28 days.

How can teenage drivers cut the cost of their own car insurance policies?

Teenagers or young drivers who drive their own cars will have to get their own insurance policy. While the cost of insurance as a young, inexperienced driver might make you wince, there are several ways you can slash your premium.

• Consider a telematics policy. Fitting your car with a “black box” that measures your speed, distance travelled and what time of day or night you drive can slash costs.
• Opt for a higher excess. The excess is the amount you’ll have to contribute towards a claim before the insurance money kicks in. If you accept a higher excess, you’ll get a lower premium. However, make sure you can afford to pay should anything happen.
• Pay annually rather than monthly. Paying a lump sum each year is typically cheaper than paying monthly, as you won’t be charged interest on the instalments.
• Choose your car with care. Faster and more powerful vehicles are seen as higher claim risks, while some cars cost more to repair. Both of these can bump costs up, so find out which car insurance group a vehicle is in before buying it.
• Build up your no-claims discount. Avoid making any claims by driving safely. The longer you drive without claiming, the bigger your no claims bonus (a percentage discount off your premium as a reward for safe driving) is likely to be.
• Take an advanced driving course. Courses such as Pass Plus can ramp up your driving experience over a short period. Some insurers reward this with a discount on your premiums. If the discount outweighs the cost of the course, you’ll be quids in. It might be worth comparing the cost of insurance with and without an advanced driving discount, so you can work out if it’s worth paying for the course.
• Investigate multi-car policies. Some insurers allow a family to insure multiple cars on a single policy, with different main drivers for each. A young driver’s car could be insured on the same policy as their parent’s cars, for example. You’ll typically get discounts compared to insuring each car separately with that insurer. Don’t assume it’s necessarily the cheapest option, though. The overall cheapest insurer varies by individual. Compare the cost of a multi-car policy versus buying separate policies with different insurers.
• Shop around. Don’t just stick loyally with first car insurance company that offered you cover. Review your policy each year by using comparison websites and getting quotes directly. If you find a cheaper deal, tell your insurer – it might try to lure you to stay.

Bottom line

A parent adding their son or daughter to their car insurance as a named driver can be a sensible way to get them covered to drive your car. Don’t automatically assume it’s the cheapest option, though – check the cost of standalone cover too, including temporary car insurance for very occasional use. And be aware of the downsides, such as the risk to the policyholder’s no claims bonus if a named driver has an accident.

Frequently asked questions

• Do I need to be insured to drive my parent's car?

  Yes. Driving on UK roads without insurance is illegal, and can have serious consequences. Unfortunately, pleading ignorance on the basis you assumed you were automatically covered by your parent’s insurance (if you’re not down as a named driver) is not going to cut it. Even if the car is insured, it doesn’t mean everyone that drives it is automatically insured. So make sure you’re covered by asking to be added as a named driver or taking out your own insurance.

• Can I put my child on my insurance as a named driver?

  Yes. You can add anyone you like as a named driver on your policy. They’ll be covered under the same terms as you. Be aware that adding a young, inexperienced driver is likely to increase your premiums substantially, though.

• Can parents take out insurance for a car their child owns?

  Insurers don’t care who pays for a policy, so a parent can pay for a policy in their child’s name. However, what parents mustn’t do is take out insurance for their child’s car in their own name and add their child as a named driver to try to keep costs down. The person who drives the car the most must be listed as the main driver, regardless of who’s paying. Otherwise, you could be found guilty of a form of insurance fraud known as “fronting“.

• As a young driver, is it cheaper to be on a parent's car insurance than to take out your own?

  If you own your own car, being named on your parent’s insurance policy isn’t really an option. You need your own policy. However, if you want cover to drive your parent’s car occasionally, then asking them to add you as a named driver might be cheaper than taking out your own policy to use their car. It’s not a sure thing, though, so compare costs for both options before making a final decision.

• Can a parent be added to their child's policy?

  Yes. If a teenager is the main driver of a car, but their parent drives it every now and then, this can be a good way to cut the cost of the teenager’s car insurance policy. Just as adding a higher-risk driver as a named driver to an experienced driver’s policy can push premiums up, adding a lower-risk, experienced driver to the policy of someone who’s young and has only just passed their test can being premiums down. That’s because the insurer assumes the more experienced driver will be behind the wheel at least some of the time, spreading the risk.

• Can a child stay on their parent's car insurance if they move out of home?

  Yes, you don’t have to live with someone to be a named or additional driver on their policy. However, someone that doesn’t live with you probably won’t use the car that often. A good (and potentially cheaper) alternative is for them to take out temporary car insurance that covers them only for the times they need to drive the car. It’s available for anything between 1 hour and 28 days.