Co-Parenting? Learn About the Car Insurance Teens Need

If you're co-parenting and you have a teen who will be driving soon, it's time to talk car insurance. While it's often overlooked, car insurance is an important topic for parents of new drivers. 

Besides the fact that good auto insurance coverage is often required by law, it's also a smart financial decision that may protect you from shelling out a ton of money if an accident happens. Making sure you follow your insurance company's rules is important. But what do you do if you have a special situation, like a child who lives in more in one household?

With co-parenting, insurance is another thing that may just be more complicated. We'll help you sort it out in this post. 

Insurance Challenges

With insurance policies, it's best to start by doing your research and being open and honest with your insurance company. 

"A car insurance policy is made up of multiple components," says Maxime Rieman, Head of Insurance at Value Penguin, a company that provides information and tools for consumers who want to make better financial decisions. "And the rules your insurer has for each type of coverage may be different." 

Before you assume anything, it's best to ask. Rieman strongly cautions against hiding information from insurance companies. For one thing, it can risk your coverage and increase the possibility of a claim denial later. 

Now, here's what you need to know about custody arrangements.

Divorced Parents With Joint Custody

Joint custody arrangements are becoming more common. According to research published in the journal Demography, this trend represents a departure from the past, when it was more common for one parent to have full custody and co-parenting wasn't as popular quite yet. Changing norms mean there are more parents now who have to juggle parenting decisions and issues such as who is responsible for paying a teen driver's insurance premiums. 

It's not always obvious. You might assume you can fully insure your child regardless of where they are, but with car insurance it's not that simple. 

In fact, it's possible that both parents may need to insure their child separately. In a real sense, your kid is a member of two different households. This depends on the insurance company, so it's really important for both parents to check with their insurers. If one parent plans to provide insurance, this may mean the new driver can't use the other parent's car--though this isn't necessarily the case. The insurance company may just request proof of insurance for your teen. 

"The most important consideration is to make sure both parents' insurers are notified of the vehicles the teen regularly has access to and drives," Rieman recommended.

One Parent Has Primary Custody

According to Rieman, the primary custody parent is usually expected to list their child on their insurance policy.

A teen driver who's usually with you at your home should be listed on your insurance in order to drive, whether they're currently in your care or the other parent's. Keep in mind that your child may not have coverage if they're using the other parent's vehicle. Again, this depends on the insurance company. 

"If the other co-parenter also has a car, their insurer will also need to be notified that the teen has coverage, and may request documentation that this coverage is in place. When the insurer is notified, they'll let you know if being covered on one policy is insufficient and the teen needs to be listed on both, but this situation is less common," Rieman added.

Getting Insured: Additional Tips from Value Penguin

As you plan your teen's coverage, here are additional tips that may help:

  1. Let your insurer know if your teen receives a learner's permit--you probably don't need to add your kid to the policy just yet, but your insurance company should be notified anyway. 
  2. If neither you nor your co-parent own a vehicle, you may not need coverage for your teen unless they drive a friend's car (or their own). 
  3. Your teen may need to be on your policy even if they aren't driving. The insurance company may still see your teen as having access to the car. 
  4. Your teen will likely pay more for insurance if they have to buy their own. Adding them to your own policy is generally more budget-friendly.