A motorist's age can play a big part in what he or she will pay for automobile coverage, and the less experience a driver has behind the wheel, the more the premium is likely to be. Since younger drivers can cost a pretty penny to insure, parents often put their children on their auto insurance policies to get a cheaper rate. Even though the parents' premiums will increase, it's usually the most affordable option. There is no certain age set across the industry at which a child is no longer eligible to stay on a parent's policy, but certain life events will mean it's time to get their own car insurance.

​When Children Should Stay on Their Parents' Policy

Generally, children can stay under the family's coverage as long as they are residing in the same household. It's also often advised that a child who will be operating a parent's car be listed on the policy in order to avoid uncovered accidents. If a carrier who receives a claim learns that the child who was driving the car was living in the house but was not listed on the policy, the company can bill for the premium that should have been paid, deny the claim, or refuse to issue a policy renewal.

Carriers will also allow a child to stay on the family's auto coverage while they are away for school. If a parent has a teen who will be going away to college and not taking a car, it may be a good idea to let the insurer know. The Texas Department of Insurance advises that having a child away at school without regular access to one of the listed cars could bring a discount on the premium.

When Children Need Their Own Policy

Auto insurers will often stop allowing policyholders' children to remain on coverage once they fly the nest. If a young adult comes home from school and decides that moving out of mom and dad's is a good idea, they may want to conduct an auto insurance rate comparison and factor in the cost of remaining insured, unless they don't plan to drive.

One major life event that would cause a person to need their own policy is getting married and starting to build a home with a spouse. Once children get a place of their own, they will also need car coverage of their own because most policies only include those who are considered family household members.

Many families help each other out, especially those who have been affected by the economic downturn. And while having a spouse coming to move into the family's house may not be everyone's first choice, it's possible to have him or her added to the in-laws' insurance policy if that's the only option. The spouse will be considered a family member since they will now be related by marriage.

A good rule of thumb to follow is if a child becomes independent and is no longer under their parents' roof, a separate policy will probably be needed. However, car insurers do have different guidelines, and it could be helpful to contact the insurance carrier before making changes to make sure coverage is uninterrupted.