In some cases, you can add a relative like a grandchild on the grandparent's car insurance if they are a primary or secondary driver of the vehicle, or if they live with the grandparents who are their legal guardian and drive their vehicles. It can’t be only if the grandparents, for instance, gave the grandchild a car, as the car has to be in the name of the grandparents.
Otherwise, the person whose name the car is registered to would be the one responsible for the car insurance coverage, i.e. the grandchild.
If none of the above instances are true, then they can’t add them to their car insurance just so that the custodial parents can save money. It has something that falls into one of the above categories. Also, the grandparents would then be responsible for any damages or other charges if the grandchild was in a car accident and it was their fault.