Still on Your Parent’s Insurance? The Longer You Wait, the Higher the Rate!

Are you a young adult in your 20s still on your parents’ insurance policy? Many young adults often find comfort in staying on their parents’ insurance, but what they might not realize is that this decision can have a significant impact on their financial future. In this blog post, we’ll explore the concept of insurance scores, debunk the “age 25 myth,” and discuss how delaying the transition to your own insurance policy can lead to higher premiums. We’ll also provide valuable insights on what affects your insurance rate and how to improve your insurance score, along with the potential benefits of using telematics and driving score apps.

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Do You Know What an Insurance Score Is?

Insurance Score

An insurance score is a numerical rating or score used by insurance companies to assess the risk associated with an individual or entity when providing insurance coverage.

Factors of an Insurance Score

  • Credit History
  • Driving Record
  • Claim History
  • Insurance History
  • Other Factors

The Age 25 Cheaper Insurance Myth…

There is been this rumor for years to wait to come off your parent’s policy till you’re 25 and you will get a better insurance rate….. that is a myth!

Insurance works the same way credit works. If you don’t have established credit in your name, you will not have a good credit score.

The same thing happens in insurance. If you don’t have any insurance in your name, you won’t have a good insurance score. This means you will pay a higher rate.

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What Else Affects Your Rate?

Things that affect your insurance rate are clean history, such as accidents, or even comprehensive filings like windshield claims, roadside claims, and rental claims all of these affect your insurance similarly to accident claims. 

Shopping your insurance frequently and bouncing around from carrier to carrier also affects your insurance rate, and it’s not good practice. 

You should never move insurance carriers more than once a year, and even that is now getting frowned upon in the current insurance rate climate. Also, the sooner you can get off your parent’s policy the faster you can improve your insurance score. Other factors are listed below:

  • Location: Where you live plays a significant role in your premium. Urban areas generally have higher premiums due to increased traffic and accident rates.
  • Driving Record: Maintaining a clean driving record is one of the most effective ways to keep your premiums low. Traffic violations and accidents can cause your rates to skyrocket.
  • Type of Vehicle: The make and model of your car, as well as its safety features, impact your premium.
  • Coverage Levels: The amount of coverage you choose also affects your premium. Higher coverage levels result in higher premiums.
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Why Staying on Your Parent’s Policy is Hurting You

While staying on your parents’ insurance policy might seem like a cost-effective choice, it can have consequences. When you delay getting your own insurance policy, you deny yourself the opportunity to develop your insurance score. As a result, when the time comes to transition to your own policy, you may face significantly higher premiums.

The Consequences of Delaying Your Own Policy

Let’s put this into perspective with an example. Imagine you stay on your parents’ policy until you’re 30 years old. By doing so, you’ve missed out on ten years of building your insurance score. When you finally get your own policy, the lack of an established score can lead to substantially higher premiums. The longer you wait, the higher the rate you’ll pay.

How to Improve Your Insurance Score

So, how can you improve your insurance score as a young adult? Here are some tips:

  • Get with a preferred carrier
  • Hold proper insurance limits (not state minimal)
  • Not shopping your insurance frequently
  • Knowing when to make a claim
  • Taking advantage of multi-insurance discounts
  • Managing your finances responsible and paying bills on time
  • Maintain a clean driving record

Telematics and Driving Score Apps

Innovative tools like telematics and driving score apps offer a new way to save on insurance premiums. These apps monitor your driving habits, rewarding safe driving with discounts. By using telematics, you can proactively influence your insurance score and reduce your premiums.

Transitioning to Your Own Policy

When is the right time to transition to your own insurance policy? It’s essential to plan this carefully. As you approach your early to mid-20s and gain more driving experience, consider shopping for your insurance policy with a preferred carrier. Do not make the mistake of going to a captive insurance company. Look for an agency of brokers that can shop multiple carriers. By doing this, you’ll be better prepared to secure affordable coverage when you’re ready to make the switch.


In the world of insurance, waiting can be costly. Don’t fall victim to the “age 25 myth” or delay taking control of your insurance destiny. As a young adult, be proactive in building a strong insurance score, understanding the factors affecting your insurance rate, and exploring modern tools like telematics to save on premiums. The longer you wait, the higher the rate, so start your journey to responsible and cost-effective insurance practices today.

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Need Help Making the Switch?

Ready to take control of your autonomy? Consider discussing your options with an E3 Insurance Advisory Group engineer. We’ll research different insurance providers, explore telematics and driving score apps, and leave you educated on the complexities of insurance as well as how and when to use it. Fill out the form below to get started today or call us directly at 636.542.8966

Additional Resources

Driving App Resources

How to Improve Your Insurance Score

Sherry BermanSherry Berman
17:55 08 Dec 22
We just moved over to e3 with Chris Stone, 1 1/2 years ago. Our house flooded during snowmeggedon in Texas last February. The insurance companies were overwhelmed with phone calls from Texas. Our insurance company was not responding to us on a timely basis, and because of the supply chain shortage, we knew we needed to act quickly. Chris knew who to talk to at our insurance company, and was a total advocate for us and made sure that our needs were being taken care of. Our last insurance agent was the advocate for the insurance company, not us. Chris knows the business inside out. He guided us along the process of what to do. e3 represents many different insurance companies, which gives Chris the ability to guide you into the best policy that meets your needs. He explains the insurance lingo in layman terms, and makes sure that you and your family are protected. My husband and I totally trust Chris to give us the best policy with in our budget.
Andy BermanAndy Berman
21:56 07 Dec 22
e3 Insurance and Chris Stone are simply the best!! After experiencing a flood in our house and a total redo necessary, Chris made the experience completely seamless!! There simply is no one better!!
Alex ThipkhosithkunAlex Thipkhosithkun
19:32 03 Nov 22
I can't say enough good things about Chris at e3 Insurance. He really is an expert in his field and was really helpful and thoughtful through my home and car insurance purchasing experience. But it doesn't stop there. Recently, I was facing a relatively stressful plumbing situation with my newly purchased house and after talking to Chris and putting me in contact with the right people, they had someone come out THAT afternoon-- Amazing!
Austin SandozAustin Sandoz
14:45 06 Oct 22
Chris was a client of mine for a long time. When I reached out to get a quote I was blown away. I found out my brand-new 2022 Jeep was severely underinsured and I had little to no protection for my assets.After comparing my old policy side by side with my new policy he was able to quadruple my coverage and protect my assets for LESS than what I was paying before. When it's done right, it's done right.
Sheryl KlousiaSheryl Klousia
14:29 06 Mar 22
Chris has been extremely helpful in finding us great policies for house and car insurance. He reviews our policy yearly to ensure we are getting the best rate and best coverage… and recommends changing when needed. We are very satisfied with his service… he has saved us so much over the 3 years that we have been with him ! So glad we found him. Our kids all use his services also !

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