The need for auto insurance often brings a lot of questions, especially for new, teen drivers. If you are a new driver or the parent of a teen who is about to be of driving age, then read on to learn what you need to know about how to provide them with the best, most affordable, auto insurance coverage.
Be sure that no matter what you decide to do you start finding the best car insurance rates by entering your ZIP code in the box above today!
Can car insurance be in your parent’s name, or should it be in yours? Consider the facts below as you make this decision.
Insuring Yourself Properly
Driving is an important responsibility. Not only is your life in your hands, but the lives of others on the road and in your vehicle. Being careless or making a mistake can create a situation that creates thousands of dollars of damage or even the death of someone.
All accidents that happen are not necessarily due to carelessness; however, sometimes there is mechanical failure, a child (or adult) darts into the road forcing the driver to slam on the brakes or swerves and so on.
Regardless of the reason an accident occurs, accidents do happen, which is why every state in the US requires all drivers to carry auto insurance or provide proof of financial responsibility (in a handful of states).
Should Auto Insurance be in the Parents Name?
The first thing that both parents and teens tend to ask is if it is more beneficial for the teen to have their own insurance policy or should their insurance be in their parent’s name. The answer to this question depends on the situation at hand.
You need to understand, as a parent, is that insuring a teen on your auto insurance is going to raise your rates. Depending on where you live your rates could double or even triple in price. Many parents find that they cannot afford this increase; however, many insurance companies automatically increase an adult’s auto insurance when a child in the home receives their driver’s license. The assumption is that at some point in time the teen is going to be driving the vehicle.
If you allow your child to drive your vehicle, but you do not add them onto your policy or they don’t have a policy of their own, it is considered fraud. While allowing them to drive your vehicle every once in a blue moon is not considered fraud, if they are driving it at least once a week then they are considered a regular driver. The must have auto insurance in this case.
Most parents choose to add their children to their auto insurance policy.
The reason for this is that it is far more expensive for a minor or even a young adult to purchase their own insurance policy than it is for a parent to add their child to their policy. Even if your child purchases their own vehicle, the vehicle and the child can be added to the parent’s policy.
How Much Insurance is Needed for a Teen Driver?
How much insurance to purchase is a common question among adults and teens. The first answer to that question is that you must carry your state’s minimums. Fortunately, there is no way for you to purchase less than what your state requires. What’s more, with new systems in place from state to state, it has become next to impossible to avoid carrying insurance.
You cannot purchase a vehicle without proof of insurance and you can’t register it without showing proof as well. In addition, most states have automated systems and if you cancel your insurance policy the state is automatically notified and you will receive a notice in the mail requiring that you show proof of your new insurance or your license and registration will be suspended (or provide proof that you no longer own the vehicle in question and surrender the plates).
Considerations When Purchasing Car Insurance
Aside from the state’s minimums, you have other things to consider. First of all, what type of vehicle is being driven? If the vehicle is an old clunker, then a minimum insurance policy should be sufficient. If the car is newer, then you should consider collision insurance as well, enough to cover the cost of at least two totaled medium priced vehicles. If the vehicle is financed, then you will be required to carry comprehensive insurance as well.
Knowing your teen is important as well. If they are generally inattentive, then a higher policy might be in your best interest (or possibly not allow them to drive at all), if they are very responsible and careful then you may be able to afford insuring them with a smaller policy.
You may also want to check and see what the average cost of an auto accident is in the area that you live. This information can be found online and may help you to decide just how much coverage is necessary to cover a worst case scenario situation.
In every state, the highest percentage of accidents is caused by young adults and teens (under 25 years old).
In a majority of state young adults and teens have the highest percentage of accidents that lead to the death of a person involved in the accident. These are very important things to keep in mind when purchasing insurance.
Saving Money on the Teen Auto Insurance Policy
Saving money is important for everyone and it is possible to save money on your auto insurance; yes, even if you are insuring a young adult or a teen. First of all, consider having your child contribute to the cost of the policy. Not only will this relieve some of your financial burden, your child will understand the costs and responsibility they are taking on as they contribute to paying on the policy. How much you want your child to contribute is up to you.
Next, refuse to allow your child to drive if they don’t make good grades. This is more than just an incentive to get them to excel in high school or college, most car insurance companies actually offer a discount to drivers who are good students as well. Most insurance companies consider a good student a high school student who makes all As and Bs or a college student with a 3.5 GPA or better.
Enroll your child in driver’s education classes as well as defensive driving classes. Not only will this help to make him or her a better driver, it will also provide you with another discount from your auto insurance company. Many people believe these classes are simply there to avoid getting an insurance bump if they are in an accident or get ticketed. In reality, taking these courses ensures the insurance company that you are serious about safe driving and they want to reward you for that.
Comparing Car Insurance Rates
Lastly, make sure that you compare rates between auto insurance companies. If you love the company that you are currently with, use our free quote tool to negotiate a lower rate with them, many companies will work with you, especially if you are a long-standing customer. If you don’t mind making a switch (or you are ready for the change), then our free quote tool will allow you to review quotes side by side so that you can select the least expensive policy.
Using our FREE quote tool is easy and you can use it right now by entering in your ZIP code below, so give it a try now!