Adding A Teen To Your Car Insurance Policy
For a teenager, it is one of the most important rites of passage that can happen in life. The day that a young person gets their driver’s license is indeed a memorable one. While this newly found freedom can mean nothing but positive things for teenagers, the event can also have a significant impact on the cost of a parent’s auto insurance policy. Here are some great tips about how to add a new driver to your auto plan without breaking the bank.
The Driving Permit Process
Teenagers can normally get their driving permit at age 15, as long as they are enrolled or soon to be in an approved, driver education class. A few months after tuning 17, young people can be issued their permit without first being enrolled in a driving course. In many states (like Illinois) the young driver must hold their permit 9 months and have 50 hours of practice under their belt before they can sit for the written and driving test for their license.
Make Sure You Know When To Add Your New Driver
Just when to add a new driver to their insurance plan can be confusing for parents. Sometimes auto policies require parents to add their teens to the policy when they first get their permits, while others only require that you officially add the new driver when their license is issued. It’s important not to guess or make any assumptions about the timing regarding when to notify your auto carrier of your teen joining the list of driving family members. Teen drivers are a notable liability risk to insurance companies, so make sure that you know the rules.
Smart Kids, Lower Rates
Some insurance companies will reduce their rates on adding a new driver if the student has good grades. This is commonly known as the good student driver discount. Insurance is all about assessing risk and statistically, young drivers who also achieve good grades are less likely to have accidents or engage in other unsafe behaviors such as speeding or disobeying traffic laws. In addition, many parents use the good student driving discount as a motivating factor to encourage their young people to continue to hit the books. Encourage your student to do their best in school and the insurance company will reward them for it.
Starting Out With A Less Expensive Car
Most parents don’t start their new drivers out with expensive, newer cars that cost a lot of money to fix in the event of an accident. If your teen is going to be getting their own car, stay on the modest side by arranging for a vehicle that is older or has depreciated a good amount. The insurance rates for teens on an older car are going to be lower, as compared to insuring a newer, fancier vehicle. No matter what kind of car your new driver will be using, the biggest risk to the insurance company will remain the liability portion of the coverage. However, by getting your young person an older car, the insurance costs on the physical damage portion of the vehicle will save you some money.
Liability Only Plans
If you are OK with not carrying physical damage coverage on your new driver’s car, this is another good way to save money. Most insurance companies offer liability only plans, which will cover your teen for damage to the property or bodily injury of third parties. The liability rates are still going to have a notable impact on your annual costs, but by waiving physical coverage on your teen’s car, you can reduce your overall spend. If you are comfortable with the idea of fixing their car (out of pocket) should an accident occur, this approach may be a great option.
Low Mileage Discounts
As we have been saying, the risk for insurance companies regarding new drivers is liability. The more miles that teens drive, the greater the possibility that they might be involved in an accident. Some insurance carriers offer a low mileage discount for new drivers. This means that your rates can be lowered if your young person only drives a certain amount of miles per year, say 10,000 or less. Talk to your teen about what their driving needs will be in the next 12 months. If they can hold down their miles to the limits prescribed under the low mileage discount program, this could be a real cost saver for you.
Getting a drivers’ license is an incredibly exciting time for young people. Being able to jump in a car and drive to different places offers them a level of freedom that they have never experienced before in their lives. While having a new driver in the family is exciting, it can have a notable financial impact on a parent’s insurance costs. While it’s not possible to completely avoid the higher rates incurred by adding a new driver to the auto insurance, the tips described here should be able to help reduce some of the expenses that come with a newly minted, teen driver behind the wheel.
Contact Insure on the Spot
Insure on the spot has been helping parents with teens and new driver stay safe out on the road for decades. We know what it is like to send your kids off into the great wide world or driving responsibility. Let us help put your mind at ease. For more information of our policies or to receive a FREE auto insurance quote, visit us today!