To make your decision making easier, you have to weigh the following factors and decide which is most advantageous to you:
Cheaper rate – Auto insurance companies always offer cheaper rate when the added vehicle's insurance is purchased under the parent's policy. Also, it is assumed that younger and single drivers are more prone to accidents than older and married ones. So if your child will buy auto insurance under his or her name, he or she would certainly pay more money.
Discount – If you own one car in the past and have added another one, you can certainly have a multiple car discount under the same company. Added to that, you can also have a significant great student discount if your child is still in school.
Higher limits of liability – When you purchase your child's auto insurance under his or her name, your natural tendency is to lower the premium and thus, lowering the limits (regardless of who is going to pay). However, if you decide to add your child's vehicle under your policy, your child's vehicle would automatically assume the same limits of your vehicle's coverage. Of course, since you have personal assets, you can have higher limits of liability and thus making your child's vehicle more covered under your name.
Control – Given that you own the policy, you will certainly have the first hand knowledge on the communications and notices released by the auto insurance company.
Liability and Responsibility – In the event of an accident and your child is at fault, you will assume the whole responsibility if his/her auto insurance is under your policy. There is a possibility that your assets will be exposed. You can also be sued in the event of an accident even if your child is to blame. One the other hand, you can spare yourself with all of these if you decide to buy him auto insurance under his or her name.
Surcharges – Since you own the policy, once your child is involved in an accident or have been cited with traffic violation, all the negative effects will go against your policy and thus, crippling your status as a policyholder. Sometimes if the offense is great or the incidents are frequent, there is a possibility that your policy may be cancelled. The bottom line is, you will assume the responsibility of your child's actions.
Learning process – In one way or another, your child has to learn things including learning how to purchase his or her own auto insurance and the duty that comes with it.
Since you know your child better than anybody else it is important to realize these factors before deciding on the choice you have to make. The decision therefore on whether to include your children when getting a policy or let him or her purchase a separate one is one that deserves careful consideration.