Young Driver? Stick With Your Parents’ Insurance Until You’re At Least 25

It’s no secret that, as a young driver, you’re paying a hefty premium for car insurance. So much so that a single male aged 20 will be paying 49 percent more than he will when he crests 25. A recent study, however, has a solution to minimize the burden — stay on your parents’ insurance for as long as you can.

For many, once college is over and that first real job is secured, a young driver may severe ties with their parents’ financials and try to go it alone. That’s admirable and a welcomed change for mom and dad, but in doing so, the rate increase for an individual policy versus piggybacking off their parents can, in some states, be quite significant.

This may not come as too great a surprise. After all, clumping multiple cell phone policies together into one family package will generally save money, so it makes sense for this to be the case with auto insurance. But just how much are the savings, and is it really worth it?

Well, if you’re 18-years-old and live in Rhode Island, switching from your parents’ existing policy to an individual one will result in a rate increase of 53 percent. Let’s say, hypothetically, that policy is $1,500 for the year — now you’d be paying over $750 extra.

“The bottom line is that young drivers are more expensive to insure, and if they want their own individual policy, it’s going to come at a cost,” says Mike Barry, from the Insurance Information Institute. “A young driver has a very limited driving record, not much credit history and data that show they are statistically riskier drivers.”