Minors cannot sign a contract legally so they need their parents or guardians to sign for them if they want to buy auto insurance. The age of majority is the age you are considered to be an adult and allowed to enter into contracts legally. Until then, you are deemed to be a dependent in the care of parents. Age of majority is 18 in most states but not always as it is 19 in Alabama and Nebraska and 21 in Mississippi. Until then, you need your parents’ consent and often signature on the documents if you want to buy car insurance coverage.
Carriers have to make sure that at least the minimum state requirements are met to sell policies to minors. Most companies would sell 16 or 17 year olds a policy as long as they have driver licenses and meet the above conditions. However, a 16 year old driver on average pays nearly 4 times higher premiums for minimum state required coverage and 3.6 times more for full coverage in comparison to a 25 year old. And a 17 year old pays 3.2 times more for liability and nearly 3 times more for full coverage.
Another point to check is the vehicle ownership requirements. Many states don’t have age restrictions to register a vehicle while a few others have. For example, you must be 17 year old to register a title in South Carolina. Most states would allow a minor to register a vehicle on their own name as long as parents’ or guardians sign the documents with them often at the DMV office.
Few states only allow an adult to register a vehicle on their sole names. Even if you pay for it out of pocket you may need mum or dad to buy the car in their name. That means, they will need to insure it as well since they own it. Being on your parents’ insurance may actually work out much cheaper for you even if you are the primary driver on the policy. On average, adding a 16-year-old driver to a parent’s policy costs $4,144 per year, while buying a policy on their own would cost $7,203.
You need to check the age restrictions in your state for registering a vehicle and buying a policy since states require proof of insurance to register a vehicle or issue license plates.
If you are still living with them, getting your parents to buy a car and insure it for you may work out a lot cheaper and be less complicated. That is why it is a popular choice by parents until children are over the teenage years. Even if minors have a car for their sole use, parents can get much lower rates for them due to many discounts they qualify for, including multi-car insurance discount.
Young drivers can stay on parents’ automobile insurance coverage until they leave home. This option is often preferred after considering alternative costs. An independent policy for a teen can be several thousands of dollars more expensive than insuring the teen under mum or dad’s policy.
In nearly all states, you are an adult and you don’t need anyone’s permission to enter into any legally binding deal at 18. Once you reach this age, you can buy a vehicle and insure it on your sole name or with a partner.
Still there are exceptions to majority rules. Some people may be legally freed from the control of parents or guardians in a process called emancipation. In that case, emancipated minors can buy, register and insure vehicles independently. Here are the most common ways a minor can be emancipated;
- Although a minor needs parental consent to enlist in the military, they are emancipated once they are enlisted.
- Getting married requires parental consent if you are a minor but you are emancipated once you are married.
- A court order can emancipate a minor without parents’ or guardians’ consent or even against their wishes.
Once emancipated, a minor can enter into a contract legally, including buying and insuring a vehicle.
Emancipation laws vary by state as well so you need to check them. As long as you stay within the laws, you should check what is the cheapest option available to you as well as what you are allowed to do.