Auto insurance is a necessary expense for anyone who wants the privilege and pleasure of driving a car. Parents of teenagers have a big decision to make when their children become teenagers and learn how to drive. Once teens have an official driver’s license in hand, they need to be insured just as adults do. Parents have two basic options to choose from for making sure their teens are properly insured. Either they can add the teen to their current policy, or they can purchase a separate policy that covers just the teen. Although it will raise the premium, there are some definite advantages to adding teens to your auto insurance policy.
It Might Be Required
Insurance is required for all drivers, regardless of age or driving experience. Your teenager is going to need some type of insurance policy in order to drive within the confines of the law. Some insurance companies require parents to add their children to the insurance policy as soon as they obtain their learner’s permit. If this is the case with your current insurance company, the choice is simple, because there isn’t one.
Adding a Teenager to Your Existing Policy Is an Economical Choice
Even though your existing auto policy will go up in cost by adding your teenager to it, it is still a less expensive option than purchasing a separate policy for him or her. The age and driving record of the primary insured people on the policy will be considered when teenagers are added to the policy.
There Are Discounts Available
There is no way around the fact that insuring a teen driver is expensive. However, there are several discounts available that make the cost more affordable for parents. Many insurance companies offer discounts for good students. Though each insurance company has different qualifications, the determination is usually based on the student’s grade point average. Discounts are available based on the car a teenager drives. If the car is older and not on a “frequently stolen” list, or if the car is not considered a sports car or “hot rod”, rates can be lower. Parents who opt for lower coverage amounts for their teens can also have a cost reduction on their insurance policies. Policy rates are often lower if a teen enrolls in a formal driver education class. Additionally, policy rates are often lower if the primary car a teen drives has safety features such as airbags and anti-lock brakes.
There Are Discounts Available “Named Exclusions” Are Not Necessarily Cheaper
Often, parents of teenagers have a designated car that only their child drives and purchase a separate insurance policy that covers only the teenager and that car. This action makes the teenager a “named exclusion” on the family car. That means the teen is not insured to drive the same car the parents drive. This option may seem less expensive than adding the teen to the family policy, but this is not necessarily the case. If for any reason the teen drives the family car, even if it is just down the block, and gets into an accident, he or she is not covered and the burden of the cost will fall on your shoulders. That can be much more expensive than simply adding the teen to your insurance policy.
Many insurance companies offer multi-car discounts to their customers who have more than one car that needs to be insured. Parents who have teenagers who drive their own cars are likely eligible for this discount. This discount is not an option when parents opt to have a separate auto insurance policy for their teen drivers.
Parents who have a longer driving history are generally eligible for discounts that teen drivers are not. Adding a teen to your existing policy can be more cost effective than getting an individual policy that covers your new driver since the price breaks can then be applied to the policy that covers the teen.
Suspension of Coverage
Parents who add their teenagers to their insurance policy have the option to suspend coverage while the teen is away at college. This option is great because parents only need to pay for insurance coverage when the teen is at home and using the car. There are no payments due during the time he or she is away at school and is not driving the car. Over the course of time, this option can save parents a significant amount of money. When teens have insurance policies independent of their parents, there is no option to temporarily suspend coverage during the times the car is idle, so there is no opportunity to save money.
Making sure your teen driver is properly insured is an important responsibility. Although it may seem more sensible and economical to purchase a separate auto insurance policy for your new teen driver, that may not be the right choice. Adding your teen to your current policy can be more convenient and provide additional savings that you might not be eligible for otherwise. If you need to add your teenager to your auto insurance policy, contact a local insurance agent to find out more.
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