Teens have to start from somewhere, improve driving skills by practice and get over this phase of high auto insurance rates. It is better to be proactive when you have a new motorist in the house rather than reactive to expensive quotes. There are several ways of insuring young drivers, depending on people’s preferences, financial positions and current circumstances. So, it is best to have a look at them and choose the most suitable and hopefully cheapest option.
Parents can either add the teenager to their policies or a separate policy may be needed or preferred. Usually the first option is cheaper, convenient and preferred by most families. But it may be necessary to choose the latter solution depending on circumstances.
Adding Teens on Family Policies
This could be a good solution for the time being and certainly in the first year or so. This way they can get some behind the steering wheel experience that can make it easier for them when they want to buy their own coverage. Here are a few reasons why this would be a better option for most people.
Sharing on the Savings: Parents would qualify for a few discounts for being married, homeowner, having clean driving history, good credit record and being accident-free. These savings will reduce the burden of higher rates for adding a youngster to policies. The downside is that they would be putting their accident-free status on the line in case of a crash.
Loyalty Discounts: If you are with a carrier for some time they would probably offer you lower prices for it. This will reduce the overall cost about five to ten percent and allow you to get more economical car insurance for youngsters in the family as well. It will be a few years before they can have such benefits on their own.
Multi-car Policies: If your child has his/her own automobile they can benefit from discounts offered under the multi-vehicle plans if they can be included in the family plan. Having several vehicles under one package can provide you savings that a novice driver can benefit from. You need to think about the auto ownership in this case as some states may insist on seeing the auto owner’s name on the schedule too. But this can be overcome with a little planning or buying joint auto insurance policies.
Sharing Automobiles: When children are included in family plans you can share autos in the household. It may be possible for parents to exclude teenagers from policies if they have their own vehicle and coverage, depending on the state you live in and carrier you apply to.
Buying a Separate Automobile Insurance Coverage for Youngsters
In some cases it may work out cheaper to purchase a policy for them and it may be more desirable. In any case, it is best to explore all the options before making a final decision since large sums of money are at stake. Here are several reasons why it may be a good idea to get them their own coverage.
Expensive to Insure Autos: If parents have a high risk automobile it may not be cost effective to add a teen on and in some cases it may not even be possible. Many providers wouldn’t include them with a sports car. Then, you would have the dilemma of selling the auto and getting a safer one for everybody or getting another one.
Parents with Bad Records: A serious traffic violation like DUI can make mom or dad’s premium expensive so there may not be any benefits of adding a child. We have seen above how parents’ discounts would help to get cheap vehicle insurance for teenagers. Here we would see the opposite. You would be multiplying dangerous with higher risk that doesn’t help anyone.
Separate Address: Your son or daughter may be staying in the college and keeping the car there most of the time. In that case, it may be complicated to include them onto a multi-car plan. Then, you should talk to the provider and get discounts for buying another policy from them. You can look at other savings that can be obtained by paying the premium in full and having a breakdown service contract from companies like AAA.
Financial Independence: Some juniors may want to deal with their own expenses and want to establish history at early ages. Personal choices have to be respected and most parents would welcome a child who pays for himself/herself. Then, there may not be any debate over which option would be better.
You should get quotes for both under your coverage and buy them a separate policy. Then, it will be easier to see which option offers cheaper auto insurance for a young driver. If the savings are not great you might as well get them their own policies. In that case, yours wouldn’t be affected if they have to make a claim in the future.
Families are different in many ways. Some would know what to do right off the bat while others like to look at all the alternatives and discuss it through first. Hopefully, the answer will stare you in the face once you go through money, convenience and protection angles.