My Child has passed his Driver’s Test.  What should I do about car insurance for our inexperienced new driver? 

It certainly is scary.  Seems like they were just toddlers wanting to hop on a plastic moving toy with wheels. Now it’s time to transition into the real world as a responsible teen in the driver’s seat. As a parent, you should understand the options and why and how to add your children to your policy.  We'll explain the advantages and disadvantages of including your child on your policy.

Adding a new driver onto your exiting policy: 

Advantages:

•                      By adding your child to your current policy, you are getting the same coverage for them as you have for yourself. Your individual coverages, limits, and deductibles will be applicable to your new family member driver. You can make necessary adjustments to your coverage if you are adding a car to your policy.
•                      Insuring more than one car with a company may entitle you to a multi car discount.  Your excellent driving record can also add up to cost savings when you add on a new inexperienced driver.
•                      Premiums will go up. We are all aware that teenaged drivers are more at risk for auto accidents.  You are adding more risk to your auto insurance policy and you will pay a higher premium.
•                      An accident may cause a rate increase. There are two factors that you and your teen drivers should be aware of.  If they are involved in an accident or if they are ticketed for moving violations, you might be subject to a policy rate change, and you might lose some of your discounts (ex, if you have a good driver or claim free discount if these are available with your insurer). Review your coverage limits and be comfortable with what your out of pocket expenses will be (deductibles etc.), should your new driver have to submit a claim to your carrier.

Buying your teen a separate car insurance policy

Cost, cost, cost…  This is usually a no-brainer but depends on your family and your personal financial decisions. Insuring your new driver separately is usually higher than the price of one plan for the entire family. An individual policy also means your new driver won’t be eligible for the discounts you have on your policy.

However, a separate policy might be better for your young driver in certain situations. If you or someone on your policy was recently was convicted of a serious offense or multiple moving violations, the consequences of an increased premium for this offense might be escalated if your new driver is added to your policy.  For this reason, you would consider a separate policy for your teen.

How can we prepare to save when my teen becomes ready to drive? 

Choose a safe car for your teen

Insurance companies will usually consider lesser premiums if you choose a vehicle that is reputable or traditionally more safe. If your teen is in the market for a new car, consider the safer cars and take advantage of premium discounts that might be available for certain models of safer cars.

Other ways to save

Your teen can prepare in other ways and help offset the extra premiums.  Some states have driving courses that insurance companies will take into consideration when pricing your policy.  There are also “good student discounts” available to your child if they maintain a certain GPA in high school or college.  You should notify your insurance company in either case to see if you qualify for a better premium.  

Rearrange your policy’s coverages

Review your policy and coverage limits with your insurance agent if you are adding another vehicle to your policy.  If the additional car is a used, older vehicle, you may want to consider opting out of comprehensive and collision for the older auto to reduce your premium payment.  Just be sure that you know the consequences in the event of an accident. You should still carry comprehensive and collision on other cars or trucks on your policy.

If your premiums are still considered by you to be unaffordable, consider changing your deductible.  When you increase your deductible, your premium will be decreased.  Just be sure you will not be put in a financial bind if you have an unfortunate accident and have to come up with that new amount at the time of the accident. 

Call us to discuss whether you should add your new driver to your policy, or consider taking out a separate policy.  

By Craig Bruno