Am I covered under my parents' car insurance?

Getting your first driver's licence is a major milestone for young drivers. Whether you're borrowing your parents' car to run errands, driving to school, or hanging out with friends on the weekend, many young Canadians rely on their parents' vehicles as a mode of transportation.

With insurance costs on the rise, it makes sense that more and more young drivers are sharing vehicles with their family members. In the fourth quarter of 2023, Canadian families spent $2.2 billion on car insurance, according to Statistics Canada. At the same time, insurance rates for cars climbed 5.4% year over year in March 2024, with Ontario drivers facing spikes as high as 9.6%.

So, what happens if you're involved in an accident while driving your parents’ car? Are you automatically covered under their insurance policy? Or do you need your own car insurance policy? The answer depends on several factors, including where you live, how often you drive your parents' vehicle, and whether your parents have officially added you to their policy.

In this guide, we're breaking down everything there is to know about hopping on your parents' policy, including who qualifies for auto insurance coverage, when you are and aren’t protected, and the legal consequences of driving without proper insurance. Stick around for more information.

Who is typically covered under a parent’s car insurance?

Car insurance policies often automatically extend protection to all household members unless it's been otherwise stated. For insurance purposes, a household member is generally defined as someone living at the same address as the policyholder and is related by blood, marriage, or adoption. On all car insurance policies, there are two main categories when it comes to drivers:

1. Primary driver: A primary driver is the person who drives the car most often. Every vehicle must have one.

2. Occasional driver: Occasional drivers are those who live in the same household as the primary driver but don't use the vehicle as often. For example, they may only use the vehicle on the weekends to drive to and from work.

If you're a teen or young driver living at home and you only use your parents' car one or twice a week, you likely qualify as an occasional driver. That said, to be added to their existing policy as an occasional driver, they will need to notify their insurance company and formally ask to list you as one before you receive coverage.

Driver's licence address & policy address

Car insurance coverage also depends on where you live and what address is listed on the actual policy. So, for example, if you’ve moved out and updated your licence to a different address (let's say your school), your eligibility to remain under your parents’ policy could change. Most insurers require household members to reside at the same address to receive coverage.

Therefore, if you plan on moving away for school or into your own apartment, but still wish to be covered under your parents' car insurance, you'll need to speak with their insurance provider to confirm whether you have coverage or not.

Scenarios where you're covered under your parents' auto insurance policy

Let's take a closer look at some scenarios where you would be covered under your parents' auto insurance policy, as it can help you avoid any unexpected costs and fines:

You're a student living at home

If you're a student who's still living at home, no matter what age you are, you'll still be considered a part of their household. So, as long as your parents have notified their insurance company that you will be borrowing their vehicle and are listed as a secondary driver on their policy.

You're a teen with a G1 or G2 licence

In Ontario, G1 drivers must be accompanied by a family member with a full and valid driver's licence at all times when operating a motor vehicle. In most cases, parents will add their G1 teens as a secondary driver to their policy. In contrast, G2 drivers can drive someone else's car without a fully licenced driver in the vehicle. Again, in such cases, parents will add them to their own policy until their G2 teen driver purchases their first car and insurance policy.

You are home for part of the year

If you're a student living away from home for part of the year, but return for holidays or summer break, your parents’ insurance may still cover you if you have a valid driver's licence that's still registered to their address. Most insurance companies consider you a "temporary resident," which will still qualify you for coverage under their policy.

Scenarios where you aren't covered under your parents' car insurance policy

If you're driving your parents' car regularly under the following scenarios, you may not be covered:

You're living at another permanent address

If you've permanently moved out of your parents' home and your driver’s licence has a new address on it, you're technically not considered a household member. In this case, you'll need to purchase your own auto insurance.

You're the primary driver of your parents' vehicle

Aviva conducted research for over 2,000 young motorists in Canada aged 17 to 25, and discovered that one in every six (17%) admitted to having a 'fronted' car insurance plan. "Fronting" is a type of insurance fraud where a young driver is listed as an occasional driver on their parents' policy to secure lower insurance rates, even though they were the primary ones.

If you're using the family car more than your parents are, but you're still listed as an occasional driver, your insurer may see this as misrepresentation, which can result in:

• A denied claim

• A premium increase

• Cancellation of the entire policy

• A red flag on your insurance history

You're not listed on the policy

If you live at home and drive your parents' vehicle, but are not officially listed on their policy, your coverage may be denied in the event you get into a collision.

You drove your parent's car without their permission

In almost all cases, if the person driving a record vehicle has not gotten permission from the owner and something occurs, the auto insurance policy will not be valid.

Will my driving record affect my parents' insurance premiums?

Yes, your driving record will affect your parents' insurance premiums. Statistically speaking, young drivers' insurance, regardless of whether they're on their own policy or someone else's car insurance policy, will be more expensive if they are under the age of 25, given that they are at a higher risk of car accidents than more experienced drivers.

According to Transport Canada, new drivers are eight times more likely to be involved in a serious crash compared to experienced drivers. Therefore, if you're thinking about being added to your parents' car insurance policy, know that your driving history will factor into premium costs. However, how much your driving history plays a role in these costs will vary between insurance providers.

Ultimately, maintaining a good driving record with no traffic violations or at-fault accidents as a new driver is the best way to secure lower car insurance rates and qualify for safe driving discounts, regardless of whether you're driving another person's car or your own car.

Can I drive my parents’ car if I live in another province?

You may be able to drive your parents' car if you live in another province, if you are a full-time student living away from home, but are still legally registered at their address on your driver's licence. This may not be the case for all policies, however. So, we recommend speaking with a broker or your insurance company directly for more information.

Do I need to be listed if I only drive once a month?

Yes, regardless of whether you're a regular driver or only drive once a month, you will need to be declared on your parents' policy to receive coverage in the event of a claim.

If I buy my own car, can I still be covered under my parents’ policy?

No. If you buy a car, you will need to purchase a separate policy for that vehicle.

Can my parents remove me from their insurance coverage?

Yes, you can be removed as an insured person from your parents' car insurance at any time. For example, they may choose to list you as an excluded driver, stating that you are not to drive their vehicle under any circumstances. If you are listed as an excluded driver on any car insurance policy, you will not be covered anytime you operate the vehicle.

Legal and financial risks of driving a car without insurance

Car insurance is mandatory in all of Canada for all drivers using public roadways and is intended to protect the interests and finances of all motorists operating a motor vehicle. With over 26.3 million registered motor vehicles in Canada as of 2022, having valid insurance coverage is essential to protecting you in the event you get into a car accident. According to Insurance-Canada, one of the major issues the insurance industry faces as a whole is the increase in uninsured drivers on the road.

So, what happens if you're caught driving without property auto insurance? Because insurance is regulated on a provincial level, the consequences of driving without insurance coverage will vary. However, in most cases, you can anticipate the following consequences:

• Fines ranging from $1,000 to $50,000.

• The suspension of your driver's licence.

• Vehicle impoundment.

• The inability to find an insurance company that will cover you in the future.

• Higher premiums.

Note that if you frequently drive your parents or someone else's car without being properly listed on their insurance policy, you could have your claim denied if you are involved in a collision. This could lead to thousands of dollars in repair costs, medical bills, legal fees, and more.

How BrokerLink can help

BrokerLink is a leading insurance broker with over 30 years of experience helping Canadians find the right coverage for their driving needs. Whether you want to be added to your parents' insurance policy, are looking to buy your first car insurance policy, are looking to buy your university student a vehicle, or have other questions about your coverage, know that our brokers are here to help. With access to policies from top insurance companies in Canada, our brokers can help you shop around for:

• Third-party liability coverage

• Uninsured automobile coverage

• Accident benefits insurance

• Collision car coverage

• Direct compensation - property damage

• Comprehensive car coverage

• Accident forgiveness

• Student car insurance

• Multi-car insurance policy

• And more!

To learn more about the auto insurance available to you, contact BrokerLink over the phone or use our online quote tool for a competitive insurance quote within minutes!

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