Yahoo Autos Adding a Teenager to Car Insurance: Everything You Need To Know
Adding a teenager to auto insurance can be a costly proposition, but by following the proper steps, you can potentially save money on an expensive new-driver car insurance policy. Use this guide to obtain auto coverage for your teen driver when the time comes.
Review Your State Laws
Parents often wonder when to add teens to their insurance coverage. The rules about this vary by state and the policies of your insurance provider. Some states require coverage only for licensed drivers in the household, while others also require coverage for household members who have learner's permits as well. WalletHub reports that many insurers provide free coverage for teen drivers with a permit until they turn 18 or until they earn a full license, as long as they only drive when they are accompanied by a licensed adult. On the other hand, some companies require your teen to appear as a full driver on your policy as soon as they have their learner's permit.
Calculate Coverage Needs
Though your search for coverage will start with the minimum liability policy in your state, you should probably increase your coverages beyond the state minimums when you add your teen to your auto insurance policy. Your bodily injury liability pays the medical bills of other drivers and passengers if someone on your insurance policy causes an accident, while property damage liability pays to repair damage to others' vehicles and property after an at-fault crash.
For example, CarInsurance.com reports that most states have fairly low liability requirements and since teens have a statistically high crash risk, if your coverage limits aren't high enough, you could end up paying these costs out-of-pocket if your teen driver is in an accident. Some experts even recommend buying an umbrella policy with $1 million in liability coverage if you have an adolescent driver in your household, just to be safe.
If your teen will be driving a leased or financed vehicle, they will also need to be covered under collision and comprehensive policies. If your child will be driving an older car (or if you want to lower the cost of your auto insurance payments), you may want to drop these types of coverage.
You should carefully consider your deductibles when selecting coverage for your teen as well. Choosing a high deductible amount will lower your premium cost and reduce the risk that you will have to file an insurance claim (and pay higher rates) if your teen has a minor fender-bender.
Shop Around
Once you decide how much insurance you need, get a quote from your current provider to add your new driver to your policy. You should also shop around and obtain rate quotes from a few other insurance companies to increase your chances of finding a competitive price for coverage.
While you're researching insurance prices for your teen, don't forget to ask each agent about available discounts. Common savings programs which new drivers may be eligible for include:
A good student discount can provide savings of up to 25 percent according to Insure.com. The website reports that insurers offer these savings for a GPA of at least a 3.0 in college or high school courses.
A driver education discount of up to 15 percent for completion of defensive driving or similar courses. Some insurers even give a discount for finishing school-based driver's ed classes as well.
A low-mileage discount for drivers who travel less than 10,000 miles per year. If your teen doesn't tend to go very far, you can potentially qualify for savings on your premium payments.
A telematics discount of up to 45 percent for so-called pay-as-you-drive programs. With this type of policy, you plug a small device into your teen's car to remotely monitor driving behaviors. Safe driving can result in significant savings, not to mention peace-of-mind for parents, but these plans can backfire if your teen drives in an unsafe manner.
Consider a Monitoring Program
If you have concerns about your teen on the road, you may want to choose an insurance company that offers parental monitoring for young drivers. The Steer Clear program from State Farm is available for drivers younger than 25 with no history of accidents or tickets. Participants complete five online training courses and complete a designated number of practice driving hours through a smartphone app. Parents can also use the app to check on their teens' driving behavior and review the progress of their teens' completion of the required driver education courses.
You can also opt for the Teen Safe Driver Program from American Family. This auto insurer provides an app with technology that monitors for unsafe driving behaviors. Your teen will receive a score indicating how safely they drove and suggestions for improvement after each trip. Parents qualify for a 10 percent premium discount after teens use this program for a year or log 3000 miles with the app, whichever comes first.
Sign on the Dotted Line
Whether you've chosen to stay with your existing auto insurance provider or go with a new company, the final step is to add your teen to your insurance coverage. You'll also have to pay the adjusted premium based on the cost for your new driver and their vehicle, if applicable.
Some families may also want to consider purchasing a separate auto policy for their teen driver. In some states, your teen may be unable to sign a contract before they turn 18 or 21, depending on the state. However, you might want to consider this option if you have a younger driver with existing tickets or accidents, since adding them to your existing policy could cause your rate to skyrocket.
Even after you've successfully added your teen to your car insurance, experts recommend shopping around for updated rates every six to 12 months. Adolescents without accidents or claims experience a gradual decline in premium prices, so you can usually save on your premiums when your driver turns a year older if they maintain a safe driving record.
Check this out if you need additional information, resources, or guidance on car insurance. https://www.caranddriver.com/car-insurance/
Sources:
https://www.carinsurance.com/Articles/best-ways-to-insure-teen-driver.aspx
https://www.insure.com/car-insurance/teen-permit.html
https://www.caranddriver.com/insurance/
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