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Guide · Car insurance

Adding a grandchild to your car insurance: what it costs and your options

Young drivers are among the most expensive to insure. Here's how to keep your grandchild covered without putting your own record and savings at risk.

By the Sagewise Editorial Team·Updated October 17, 2026·7 min read·How we check facts

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Key takeaways

  • Insurers generally expect licensed drivers in your household, and regular drivers of your car, to be listed on your policy.
  • Adding a newly licensed driver usually raises the premium noticeably, because young drivers have higher crash rates.
  • Good-student, driver-training and telematics discounts can soften the increase. A separate policy is sometimes an option.
On this page
  1. Who needs to be on your policy?
  2. Why the price goes up
  3. Your options
  4. Discounts that can help
  5. Protecting your own savings

Grandparents often lend a car to a grandchild who is learning to drive, home from college or living with them. Before you hand over the keys, call your insurer. How your grandchild is listed on (or left off) your policy decides whether a claim is paid.

Who needs to be on your policy?

Rules vary by insurer and state, but as a general pattern insurers expect you to list licensed drivers who live in your home and anyone who drives your car regularly. Occasional, permissive use by a visitor is often covered under your policy, but "occasional" is defined by your policy, not by you. If a grandchild lives with you or drives your car most weeks, assume your insurer wants to know.

Leaving a regular driver off your policy can lead to a denied claim or a cancelled policy if the insurer finds out after an accident. When in doubt, ask your insurer in writing.

Why the price goes up

Teen and young adult drivers have higher crash rates than any other age group, according to federal and insurance-industry research, so insurers charge more to cover them. The increase depends on the grandchild's age, driving record, the car they'll drive, your state and your insurer.

Your options

  1. List them on your policy. This is the simplest way to make sure they're covered. Ask the insurer to assign them to the least expensive car to insure, if that matches how the cars are actually used.
  2. Have them get their own policy if they own the car, live elsewhere or drive often. This keeps their claims off your record, though a young driver's own policy can cost more.
  3. Add them to their parents' policy if they live with their parents and only visit you occasionally.
  4. Exclude them by name if they won't drive your car at all. Named-driver exclusions aren't allowed in every state, and an excluded driver has no coverage in your car.

Discounts that can help

  • Good-student discounts, often for a B average or better
  • Driver-education or defensive-driving course discounts
  • "Student away at school" discounts if they're at college without a car
  • Usage-based programs that reward safe driving

Protecting your own savings

If your grandchild causes a serious accident in your car, claims can exceed state minimum liability limits. If you own a home or have savings, consider higher liability limits and ask about an umbrella policy. Our guide to lowering car insurance after 50 explains why liability is the last place to cut.

Frequently asked questions

Is my grandchild covered if they borrow my car once?

Many policies cover occasional permissive use by a licensed driver. What counts as occasional is set by your policy, so check with your insurer before lending the car.

Will an accident by my grandchild raise my premium?

If they're listed on your policy or driving your car, an at-fault accident can affect your premium at renewal.

Sources

  1. CDC: Risk factors for teen drivers
  2. IIHS: Teenagers, fatality facts
  3. Insurance Information Institute: Background on teen drivers

This guide is for general education and isn't individual financial, insurance, legal or tax advice. Rules and prices vary by state and company. Spot an error? Tell us and we'll review it under our corrections policy.

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