Do You Need to Insure Your Adult Child Joining the Military?

Car insurance for military young drivers can be a metaphorical minefield. Of course, the armed forces have proven tactics for dealing with real minefields. But parents of young recruits are typically less prepared to navigate the complicated process of getting their new recruit set up with auto insurance.

There’s no single plan that suits everyone. However, it aims to highlight the danger zones to help you get safely to the other side.

Keeping your child on your auto insurance when they transition from high school to the military comes with benefits. But it requires sacrifice on your part.

Removing your child’s name from your policy may significantly reduce your premiums. According to the Insurance Information Institute, adding a teenager to an insurance policy can result in a 50-100% increase in the parents’ insurance premium. 

Presumably, removing an adult child from the family policy can have a similarly dramatic effect.

However, your short-term gain will likely be your adult child’s long-term loss. 

That’s because, absent their own auto policy, they may face significantly higher premiums due to a lapse in coverage. When they eventually do apply for their own auto insurance, be sure they have their own coverage set up. Forget it, and they’ll be treated as a new driver and charged exorbitant premiums.

Can Military Members Stay on Their Parents’ Auto Insurance?

Parents with challenging household budgets may be relieved to learn that some insurance companies insist their adult child has their own policy.

For example, if the young person owns the car or truck themselves, they must typically insure it themselves. In other words, the parents are generally unable to add it to their auto or umbrella policy. Parents can insure vehicles they own or co-own.

Residency Exceptions

Additionally, as a rule, an adult child must live with their parents to be on mom and dad’s auto policy. However, there are exceptions for students studying away from home. 

And those exceptions usually include service members undergoing training. So, if your child is attending a service academy or taking a course at a Reserve Officers’ Training Corps (ROTC) facility, they may be able to remain on your auto policy, depending on your insurer.

However, once their training ends, they should receive Permanent Change of Station (PCS) orders to their first duty station. Their actual residence then becomes that military installation, though they may be able to keep their parents’ home as their legal residence.

The Servicemembers Civil Relief Act allows recruits to keep the address they regard as home for many purposes, including state taxes and voting. It is assumed that a married service member needs their own insurance. Parents looking into insurance policies for their adult child should also research the Military Spouse Residency Relief Act to see how residency laws impact future military spouses.

The same applies if they receive a Basic Allowance for Housing (BAH) for off-base accommodation. In both cases, they may need their own auto insurance if they opt to amend their garaging address.

Different insurance companies have different rules governing residency and vehicle ownership. So, it’s essential to talk through your circumstances with your insurer to be certain that you’re neither losing money by assuming the company is stricter than it is, nor leaving your kid uninsured by hoping it’s less strict.

When It Makes Sense to Keep Them on Your Policy

For your child’s sake, it may be good to keep them on your auto policy for as long as you can. But you won’t be doing them any favors if you adjust their coverage without discussing it with them and your insurance company. Be sure to talk to your insurer or broker about the following scenarios:

• The young service member will be coming home on leave regularly (say, monthly) and will need to drive a car owned by the parents.
• On visits home, their driving will be limited to relatively few miles.
• The Servicemembers Civil Relief Act (SCRA) permits active-duty service members to use the place they call home as their legal residence. However, that can change if the adult child marries or buys a home elsewhere. Make sure your insurer is aware of this and that you disclose any material changes.

Be aware that, if you give your child one of your cars or trucks, or sell it to them, they will have title and will need to insure it themselves. That will reduce the number of vehicles on your policy, so you may lose some or all of the multi-vehicle discount most insurers offer. And that could somewhat reduce the savings you should get for taking a teen driver off your policy.

You might prefer to keep your current arrangement, whereby your adult child continues to drive your vehicle(s) while you retain ownership of the car(s). Then nothing changes.

When They Should Get Their Own Auto Insurance

There are circumstances in which even the most sympathetic insurer is unlikely to be able to let your young enlisted service member remain on your auto policy. Those are:

• If they receive PCS orders to a different state and choose to change their garaging address.
• When they register a vehicle in their own name.
• When they are no longer legally resident at your address.
• If they get married.
• When they reach their 25th birthday. There aren’t typically age limits on adult children remaining on their parents’ policy if the kids live at home. But an insurer that’s stretched residency rules for a service member may raise questions when the adult child hits the upper age range. 

By all means, discuss these scenarios with your insurer or broker to be sure. But the chances of you getting a positive response are slim.

Military Complications that Affect Coverage

Having a son or daughter who’s a service member should be a source of enormous pride. But, unless you’re from a military family, it also brings an alien and bewildering transfer of power from the parent to the military.

A PCS move can result in your adult child being suddenly posted far away, perhaps overseas. And these changes can have an impact on their auto insurance coverage. Some insurers offer military discounts when a vehicle is normally kept on a base, and even bigger discounts when a car is in storage because the service member has been deployed.

Meanwhile, a PCS to a different state may trigger residency issues that force a service member to insure their vehicle themselves. However, the Servicemembers Civil Relief Act typically allows active-duty personnel to keep their parents’ home as their legal residence, at least until they put down roots somewhere else. 

That should mean that your adult child can remain on your auto policy, even if they’re posted far away, because their legal residence remains your home. However, you should check with your insurer to be sure their policies approve of that arrangement.

Tips for Military Families Managing Auto Insurance

While there are some situations that would allow you to keep your adult child on your car insurance for years, they will likely need to get their own coverage eventually. Here are some tips that will help you understand how to get your young military driver set up with reliable car insurance:

1. Consult your insurer or broker to be absolutely sure your adult child is retaining full coverage. Let them know of every material change in circumstance that may impact your rate.
2. If you must (or wish to) remove the child from your auto policy, get quotes from multiple insurers to ensure you’re getting the best deal as you remove them and they establish their own policy.
3. Check what military discounts might be available to you while your son or daughter is on your policy.
4. When your adult child gets their own policy, suggest they do a wide search for a new insurer. There are military-only discounts available to them based on their unique circumstances.
5. Make sure the liability coverage is adequate, whether it’s you or your child insuring a vehicle.

Military Auto Insurance for New Service Members: The Bottom Line

It’s always traumatic when an adult child leaves home. So, don’t stress out over their car insurance. By identifying the circumstances that dictate your insurance choices, you are well on your way to minimizing stress.

Just remember, it’s important to make sure their coverage remains intact. So, call your insurer or broker and explain in full the change that’s happening. There’s a good chance the child can remain on your auto policy while still in training. But that might (or might not) change when they receive PCS orders, especially if they’re posted out of the state or country. 

Sooner or later, your adult child will need their own auto policy. When that happens, you could save serious money if you and your adult child get multiple quotes from different insurers.