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 in...

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Written by Rachael Brennan
Licensed Insurance Agent Rachael Brennan

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jun 29, 2022

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In a nutshell...

  • If you live in your home with your parents, you need to be a rated driver on the policy for coverage
  • Drivers who live in the household and who haven’t been disclosed by the policyholder may not be covered if there’s a claim
  • Deferred operators are people who have regular access to a car on the policy but who also have primary insurance

Parents can be very protective when kids go from being young adolescents to self-sufficient teens who are on the verge of becoming adults.

A parent with a licensed teen in the home has to worry about both the health and safety of their child and the health of their financial status.

That’s why it’s important for parents to buy enough insurance and structure the policy right.

Before you assume that you’re entitled to receive coverage under your parents’ insurance, here’s what you should know.

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Know the Conditions of Your Parents’ Policy


Auto insurance policies are more than just tangible pieces of paper; policies are contracts that provide the policyholder with intangible forms of protection.

In the contract, it says that there are conditions that you have to comply with if you want the insurer to pay when you or a third-party has a claim.

One of the conditions for getting insurance is that the policyholder is upfront and honest with the company when they are applying for coverage.

This includes listing all of the drivers in the household who could be driving the cars.

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What happens if your parents don’t list you and you live in the household?

If you haven’t yet convinced your parents to add you to their policy and you’re still living in the home, you shouldn’t drive their vehicles.

It’s very risky to make the decision not to add anyone in the house who drives the cars to the household’s insurance policy.

While it doesn’t seem very fair, a carrier is within their rights to deny a claim if you’re driving your parents’ car, you’re not listed on the policy, or you get into an accident.

To the carrier, the policyholder purposefully misrepresented risk in an effort to save money.

What happens if you’re driving someone else’s car?


If you live in the home and you’re still a dependent, your parents’ finances could be at risk if you get behind the wheel of a friend’s car, too.

Normally, when you’re a listed driver on the policy, the liability coverage on the policy would also pay if you got into an accident in a friend’s car.

As a dependent, your parents are liable for the damages that you cause.

The car’s primary policy may cover you as a permissive user, but that doesn’t mean your parents are off the hook. It’s too risky not to insure a teen driver.

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Do teens with their permits have to be listed?

If you’re still 15 or 16 and you only have a permit, the rules above don’t apply.

Since they don’t really have an unrestricted driving privilege, they aren’t rated the same way a licensed child would be. You need to tell your insurer as soon as you get a permit.

There could be conditions that say that a driver on the policy has to be in the car supervising the teen for a claim to be paid, but this is a legal requirement anyway.

Sometimes, insurance companies will offer teens who have their permit coverage for free.

If you still live in the home but you’ve purchased your own insurance, you’re a step closer to being fully independent.

Since you have insurance in your name, you don’t need to be rated on the policy but you still need to be listed.

You might be confused by the difference between rating a driver and listing one. A rated driver is one who can affect rates.

A listed driver who’s named as a deferred operator is one who doesn’t affect rates.

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Does listing a new driver on the policy have to change the rates?

If you’re a rated driver, the likelihood of you affecting the rates on the policy is high, especially if you’re young.

Your individual rating factors will be used to determine how much you will hike up the rates.

Some factors that insurers will look at include your age, experience level, driving history and type of vehicle.

You can still borrow your parents’ car when you live outside of the home and you have your own insurance. If you don’t have coverage, you should buy at least a minimum amount of protection just in case.

You can purchase either a nonowner’s policy or a standard car insurance policy easily by using an online quote system.

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