Thursday, April 30, 2009

JES: Parents' Auto Insurance

Often, when talking to friends about finances or cars or cellphone bills or something along those lines, friends will note that their parents cover their cellphone or auto insurance bills - whether they're simply remaining on their family's plan or whatever. While cellphones are less problematic, I've always thought that auto insurance could be - especially if the person moves out of state, it may even be illegal.

But even assuming that most people are doing it legally, it seemed widespread enough that on the question about how much auto insurance costs a person, one of the options is "Someone else covers my insurance." In total, 14.2% of respondents have their insurance covered by someone else, but obviously it's more important to focus on those in the younger crowd... and the numbers are really surprising. While I expected a sizable portion to answer that it's covered, I didn't expect 47% of the people between 18 and 24 years old who have cars to say that someone else covers the insurance. Even if we factor in singles vs. marrieds (and say that singles, especially if they're close to home, will likely stay on their parents' insurance), 39% of marrieds and 63% of singles have their insurance paid for.

Interestingly, all singles between 25-29 who have a car pay for their own insurance, while 81% of marrieds do - so the trend is not long-lasting. But for almost 2/5, then still almost 1/5 to have their insurance paid for while they're in their twenties is a pretty nice savings for the couple - while quite a drain on their parents' finances.