Do I Have to Add My Driving Child to My Auto Policy?
When you are raising a teen who has finally received their driver’s license, you’ve got some important decisions to make about car insurance. If your teen is going to drive, then he needs to be covered by a policy—but should it be your policy or one of his own? There is no statute requiring it done one way or another, instead you get to choose which situation best suits your situation.
Coverage on Your Policy
It is sometimes less expensive to add a teen driver to the parent’s policy rather than initiating an individual policy for the new driver. And if your teen will primarily be driving your car, rather than their own, this might be an ideal choice. Talk to your agent and get the rates for adding your new teen driver so you have somewhere to start.
Buying the Teen Her Own Policy
If your teen has her own car and drives frequently, then it might be a better idea to separate her risk from your own by having them get their own policy. The cost of the policy may be more expensive, but factors such as grades or completion of a formalized driving education program could work to lessen the cost. Talk to your agent again about this possibility and ask for the rates so you can compare. Keep in mind that just because your child has their own policy does not mean you are not responsible for damages that exceed the policy limits. If there is an insurable incident and the damage to the other person’s vehicle is greater than the limits on the policy someone is still responsible for the damage. This usually falls on the teen’s parent since they have a better chance of being able to afford the cost of repairs.
Other Factors in Cost
In addition to looking for discounts for good grades and driving lessons, parents should look for other discounts when insuring their teen, either on a joint policy or individual one. Other discounts can be found with daytime running lamps, cell phone apps, antitheft devices and more.
It is important that cost not be the only consideration when choosing benefits, deductibles and limits. While low benefits and high deductibles will decrease your insurance premiums, they greatly increase your financial risk should an accident occur; and with an inexperienced teen at the wheel, the chances of an accident occurring increase substantially.