Car Insurance
22/10/24 . 6 min read
Can I be added to my parent’s car insurance policy?
Your parents can add you to their car insurance policy. However, there are some factors to consider before you do this.
Alex Ritchie
Personal Finance Editor
While you can buy car insurance the same day you purchase a vehicle, the coverage may not always take effect immediately. It’s important to know whether any waiting periods may apply, so you aren’t unknowingly driving around without an active car insurance policy.
To legally drive a car in Australia, the vehicle needs to be registered. Registering a vehicle requires it to have a Compulsory Third Party (CTP) insurance policy in place. CTP insurance is attached to a car, not to an individual, so if you’re buying a second-hand car, it will often already have CTP insurance in place.
Beyond the CTP insurance, you aren’t required to hold car insurance to drive a car in Australia. However, some car loans and other car finance arrangements may require you to hold a car insurance policy as part of the car loan’s terms and conditions.
If you do choose to take out insurance on your car, you could select a more basic Fire & Theft policy, or a Comprehensive policy that provides more in-depth coverage. Generally, the more thoroughly a policy covers your car, the more the policy may cost.
Given that you can compare car insurance quotes and apply online, getting the policy may only take an hour or two if you’ve done your research. This means you can often apply for car insurance on the day you buy a car, before you drive away.
You can also choose to organise your car insurance ahead of time. Many insurance providers will let you decide the date on which your coverage becomes active. This may be useful if you’ve found a car that you plan to buy, and want to match the date the insurance coverage becomes active with the day you plan to finalise the deal and register your car.
In some cases, you may not be able to get car insurance from the same date that you apply. For example, your insurer may insist that your vehicle needs to be inspected before they approve the policy.
Waiting periods may also apply before you can make a claim on your car insurance policy. For instance, if you’re buying third-party fire and theft insurance just before the bushfire season, the insurer may not allow you to file a fire damage insurance claim straight away.
This article was reviewed by Peter Terlato before it was published as part of RateCity's Fact Check process.