Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Oct 16, 2020

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Key takeaways...

  • Many car insurance companies offer multi-vehicle discounts
  • Older drivers with a good driving record pay far less than inexperienced drivers
  • Adding a new driver to an existing policy can be expensive

Automobile insurance is notoriously expensive for drivers with limited experience, or those who are under 25.

Luckily, car insurance companies allow parents add their children and stepchildren to their existing policy and even save some money for doing so.

Many car insurance companies will even offer multi-vehicle discounts or other special perks for having multiple drivers, vehicles, and even students on your policy.

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Young Drivers: A Great Way to Save

Most insurance companies assume that drivers pose less risk when they reach 25 years of age.

For that reason, older drivers with a good driving record typically find that they pay far less than what an insurance company will charge a safe, younger driver in their own household.

To help young drivers afford the kind of comprehensive car insurance that they really need, insurance companies allow parents and stepparents to add their dependent children to their existing car insurance policy.

This can be done in one of two ways: first, a young driver can be added to a policy as an additional driver on an existing vehicle.

This is an essential step for a family with multiple drivers who share just one car.

It covers any emergency expenses incurred by the stepdaughter, as well as any damage to your vehicle or the other drivers in the case of an accident.

Adding a new driver to an existing policy is minimally expensive.

Because you’re not covering an entirely different vehicle, and only a new person in an existing one, your premium is likely to go up only slightly.

The second method involves adding an additional driver as well as their additional vehicle.

Since it is under the umbrella of your existing policy and you are covering a dependent child, your stepdaughter will pay less per month than she would on her own individual insurance policy.

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Special Discounts When Dealing in Multiples

Adding your stepdaughter to your policy is a smart decision not just for her finances, but also for your own.

Many insurance companies offer multi-vehicle car insurance discounts that can result in savings of up to 10 percent on your insurance premiums when compared to the rates you would be offered as two separate policyholders.

Insurance companies offer two types of student discounts that may benefit your entire household.

The first is a simple student car insurance discount that all students are eligible for, regardless of individual academic standing.

The second, known as the good student discount, rewards those who have a “B” average in school or higher with an even deeper discount on premiums.

Be prepared to send your stepdaughter’s transcript if this is a discount you are pursuing, however.

Your step-daughter may also qualify for additional discounts on her policy if she has taken a defensive driving course or a “driver’s education” course at her high school or local DMV location.

These drivers are considered safer from the start, and statistically get into fewer accidents than those who do not attend such courses, and insurance companies reward their effort with lower premiums.

Finally, be sure to compare policies and their rewards for safe driving.

Many policies will offer annually decreasing premiums or an annually decreasing deductible for each year without an accident.

Other companies engage in what is known as accident forgiveness. Even if your stepdaughter does get into an accident, many insurance companies will reward her in the future for safe driving.

Safe driving discounts are an especially good way to reward your stepdaughter’s caution on the road, as you can pass the savings directly along to her and teach her the real, monetary value of safety on the road.

Other Benefits

Adding your stepdaughter on your insurance plan means exactly what coverage she has and you are in control of increasing or decreasing it.

Young people are on increasingly tight budgets, and one area that they’ve begun cutting corners on is car insurance.

With your daughter on your policy, you can rest assured that her deductible is not unreasonably high and that she has not opted for the bare minimum coverage.

Risks, Liability, and Concerns

While adding your stepdaughter to your insurance policy is a great idea for both of you especially in regards to saving money.

It’s important to remember that you are still the policyholder for both people.

As such, the financial liability for any expenses incurred on the road will come back to you instead of your stepdaughter.

This represents a slight risk for parents who desire to help their children save money on their car insurance policies, but should not deter them from pursuing the option.

It’s important to pick a sensible deductible, as well as coverage options that go above and beyond the bare minimum.

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  1. https://www.allstate.com/tools-and-resources/car-insurance/what-is-comprehensive-auto-insurance.aspx
  2. https://www.esurance.com/info/car/adding-or-removing-cars-and-drivers
  3. https://www.progressive.com/customer-service/changes-to-policy-faq/
  4. https://www.geico.com/information/safety/auto/teendriving/parent-cutting-costs/
  5. https://www.libertymutual.com/auto/car-insurance-coverage/accident-forgiveness
  6. https://www.consumerreports.org/car-insurance/10-tips-to-save-on-car-insurance/