When teen drivers get behind the wheel, lining up the appropriate insurance can get complicated for divorced parents. The correct insurance setup varies based on the teen’s living situation and the parental custody rights.
This guide explores what divorced parents of teen drivers need to know about car insurance.
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- Parents must inform their insurance company once their teen starts the licensing process.
- If teenagers regularly split time between divorced parents, insurance providers recommend that the custodial parent(s) add the teen driver to their policy.
- The non-custodial parent should ask their insurer if the teen must be added to their car insurance policy.
Must both parents cover a minor driver on their auto insurance policies?
Whether or not both parents must cover a teen driver on their auto insurance varies based on the state, insurance company and situation.
For example, if the teen drives vehicles at both households, both parents must add them to their insurance policies. But if a teen exclusively drives vehicles in one household, the other parent might not need to add the teen to their insurance policy.
Why both parents should disclose teen drivers to their insurer
If the teen lives with one parent and only visits the other occasionally, the custodial parent must inform their insurance company once the child starts the licensing process. Add a child to a parent’s car insurance policy once the insurer requires it, whether the minor has a permit or a driver’s license.
The non-custodial parent should inform their insurer about the licensed child to see if they must add the child as an occasional driver. If teenagers regularly split time between divorced parents, insurers often recommend that the custodial parent add the teen driver to their policy.
Does custody affect who should insure a teen driver?
In some cases, insurance companies say it is whichever parent has custody of the teen driver when the child attends school. It is a simple question for both insurance companies covering divorced parents, so ask the insurance carriers about their specific guidelines.
If the same company insures both parents, the teen driver would be covered by both parents’ policies, regardless of whether the teen driver is listed as a driver on either policy. That is because some insurance policies define “an insured” as a person related to you by blood, marriage or adoption who is a household resident.
Since not all policies are identical, read through your auto insurance policy’s language and contact your insurer for details.
It can get complicated when a child of divorced parents lives with one parent, and the other parent gives the child a car to drive. Make sure to involve both parents’ insurance companies so teens have proper car insurance coverage if they access vehicles in both households.
Common custody scenarios and how they affect car insurance
Divorced parents can have different child custody scenarios that impact insurance arrangements. Below is a look at some of the common impacts of custody scenarios on insurance needs.
50-50 custody with a shared car
A teen who splits their time across both households and drives shared vehicles in both households should be included on the insurance policies of both parents. Since the teen shares a vehicle with each parent at different times, the parents must add the teen to their insurance policies.
Car is titled to one parent, and driven by a teen in both homes
Let’s say the teen primarily drives a dedicated vehicle titled to one parent. Typically, that parent must add the teen driver to their insurance policy for that vehicle.
If the teen sticks to driving this car across both households, it’s possible the second parent won’t need to adjust their insurance coverage. However, verifying this with your insurance company is essential because the rules vary from state to state.
Teen lives mostly with one parent but drives both vehicles
“If a teenager spends the majority of their time in one parent’s house, that parent’s policy will usually cover the teenager as a listed driver, especially if he or she is driving the car,” says Seann Malloy, founder and managing partner at Malloy Law Offices serving Maryland and Virginia. “In a 70/30 custody arrangement, for example, the parent with 70 percent custody typically insures the teenager, but both parents should check they have coverage in place to eliminate gaps, particularly if the teenager also drives the other parent’s car.”
One parent refuses coverage
If one parent refuses to cover the teen driver, the other parent often insures them on their policy.
Refusing to cover a teen driver means the teen cannot drive the vehicles in that parent’s household. For example, it might mean the teen cannot drive shared vehicles at that parent’s house.
The car is gifted by one parent, garaged with the other
Let’s say one parent gives the teen a car, but the teen lives with the other parent. Generally, the parent whose car is garaged with will add the teen driver to their policy. However, if the gifting parent retains the vehicle title, they may need to add the teen driver to their insurance policy.
What happens with car ownership by divorced parents?
It’s common for spouses to put both names on their vehicle titles during a marriage. For example, if a married couple bought a vehicle for their teen before a divorce, they might have put both spouses’ names on the title.
The marital assets, including shared vehicles, are divided in a divorce. Generally, one spouse will keep the car. Sometimes, this involves buying out the other parent or refinancing the loan into their name only. If neither parent chooses to buy out the other parent, they might sell the joint asset during the divorce proceedings and split any profits.
As the teen of divorcing parents, you’ll likely keep the vehicle. However, typically, the vehicle’s ownership will officially change from two parents to one.
Who is responsible for insurance when a teen’s parents disagree?
If parents disagree about who should pay for car insurance, consider consulting an insurance professional or getting the insurance company involved. The insurer can provide information on the necessary insurance changes for each parent.
If outside advice doesn’t resolve the situation, it’s up to the teen driver to sort out their insurance arrangements. For some, this might mean convincing their parent with primary custody to add them to their insurance policy. For others, this might mean obtaining a separate insurance policy, even though that’s often the more expensive route.
Real questions from divorced parents
Real-life insurance situations can get tricky. Below are some questions and answers from divorced parents with teen drivers.
My son is covered under his dad’s policy. We are divorced. My boyfriend lives with me, and his insurance company is trying to make him add my son to his policy. Is this correct?
Generally, the insurance company has the final say on who needs what coverage. Even though the teen’s dad has added him to his insurance policy, adding him to your household’s policy might be appropriate if your teen drives vehicles at your house.
Typically, the only way adding your teen wouldn’t be necessary is if they don’t drive any vehicles at your house and won’t in the future.
Divorced parents with 50-50 custody, two separate policies. Just bought car for son. How do we insure in the most cost-effective way?
If both parents allow the teen to drive shared vehicles at their separate houses, then adding him to each separate policy is likely the way to go. If the teen uses a dedicated vehicle across both households and doesn’t ever drive shared vehicles, it might be possible to add him to just one policy or the other.
In this type of complex insurance situation, discussing your needs with your insurance company can be helpful.
I’m divorced. My daughter drives a car her mother owns. Do I need to cover her, too?
If your daughter only drives the vehicle owned and insured by her mother, you might not need to add her to your policy. But if she ever has access to driving your vehicles, then it’s likely you’ll need to add her to your policy too.
Consider discussing the situation with your insurance company to confirm you have the appropriate coverage.
My agent says my son must be on my policy even though he’s added to his dad’s. Is that true?
This varies widely based on the situation and state. If your insurance agent has all the details, they are likely correct in saying that you need to add your son to your insurance policy.
The father bought a sports car for the child, but later stopped coverage. The mother was told to insure it. What’s the right step?
If the teen is continuing to drive the vehicle and it’s in the teen’s name, the mother might be able to insure it through her policy. A non-owner insurance policy might work if the vehicle is in the father’s name.
But it’s essential to walk through the details of the situation with an insurer or insurance professional to help you make the right decision.
Can both parents’ car insurance policies cover a teen?
Yes, teen drivers can be covered under both parents’ car insurance policies. Adding a teen driver to your policy might be as simple as calling your insurance company.
Does divorce affect your own car insurance?
After a divorce, getting your own car insurance policy is critical. You can no longer hold onto the shared policy.
Depending on the situation, you may pay more or less for coverage on your own. For example, you might pay less if your former spouse had a history of reckless driving. But you might pay more if you’ve moved to a new state after this significant life change or lost access to a multi-car discount or a married driver discount.
How to reduce car insurance costs for teen drivers after divorce
The cost of insuring a teen driver can add up quickly. Below are some strategies to help you minimize teen car insurance costs after a divorce:
- Shop around: Different insurers offer different premiums. Comparing rates across multiple insurance companies offers the best way to find the most affordable rates for your situation.
- Nail down coverage needs: The details of your custody arrangement impact your teen’s insurance needs. If you aren’t sure of the best coverage options, talk through the situation and your options with your insurance company.
- Seek out discounts: Although you might have lost multi-car discounts, look for new discount opportunities. For example, safe driving and good student discounts could lead to savings.
- Encourage safe driving habits: Both parents can work to encourage their teen to practice safe driving habits. Not only can this help to keep them safe, but also lead to lower insurance rates.
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