Understanding Teen Driver Insurance Options
Your teenager’s 16th birthday is always a cause for celebration because it means he can already start driving independently. You may be worried that adding your teen driver will lead to higher insurance premiums. You may also be wondering, “What happens if I don’t add my teenager to my car insurance?”
In this article, the Clark Law Office gives a rundown of the things to know and understand about adding a teen to the parents’ policy.
Adding a Teen Driver to Your Car Insurance Policy
A teenage driver should have car insurance whether they use their own vehicle or a relative’s. There are two ways to have a new driver covered:
- They can be added to the family’s current insurance policy. This is normally the most practical choice for a newly licensed driver.
- They can get their own insurance policy.
Adding your child to your policy may be the better option. Many insurance companies offer discounted car insurance rates for bundled policies. You may enjoy up to a 45% family plan discount when you add a teen driver to your auto insurance policy.
Getting a Separate Auto Insurance Policy
Getting your children their own car insurance policy is useful if they’re already of age. You may also consider this option if they are eligible to be independent. However, it has its own pros and cons.
Pros
- You are protected against bad driving habits observed in most teens.
- Your children will better understand how auto insurance works. They’ll learn to be more independent.
- Teen drivers are encouraged to drive safely because it lessens their costs.
Cons
- Not all insurance companies offer teen car insurance.
- It is more complex and expensive to set up.
Consequences of Not Adding Your Teenager
Legal and Financial Ramifications
Getting auto insurance for teen drivers isn’t just a practical move, but a must. Everyone must have valid auto insurance before they drive on public roads.
Driving without insurance coverage could lead to serious problems, such as:
- Penalties are given, including driver’s license suspension, fines, vehicle impoundment, or worse, driver’s license.
- You can lose possible reimbursement for vehicular damage and medical expenses following an accident.
- A teen driver caught without a proper insurance plan can constrain an insurance provider to classify him as a high-risk driver. They may lose the opportunity to enjoy benefits like a good student discount.
The Cost of Teen Driver Insurance
Why is it so expensive? Getting a separate car insurance policy for your teen driver is more expensive than family coverage. This is especially true for teens under 18. Boys are also more costly to insure than girls.
Most insurance companies set auto insurance rates using risk analysis. Since teenagers are typically in more car accidents than the general population, rates are higher. This includes the chances of the insurance company needing to pay a claim. The chances of paying a claim will increase when a driver has:
- A history of accidents
- A long commute
- Living in a big city
- Is young
Teens are considered to be prone to vehicular accidents as compared to other age groups. The United States Centers for Disease Control and Prevention cited motor vehicle crashes as a top cause of death among teens in the country. Other factors, such as inexperience, also put them at risk. As a result, the price of adding a teen driver to a car insurance policy can increase monthly premiums by more than 200%.
Reducing the Cost of Teen Driver Insurance
Does having a teen driver added to your policy help in reducing car insurance costs? The short answer is yes. Nevertheless, there are are other ways to help save money on teen car insurance.
- Encourage your child to get good grades. Several insurance providers offer good student discounts to young drivers with a 3.0 GPA (B average) or higher.
- Convince them to attend teen driving programs. Upon completion, a car insurance company may offer a driver training discount.
- Get a usage-based insurance. This type of insurance policy checks your driving habits and offers discounts on how well you drive. You’ll be able to save money if your teenage driver has a clean record.
Shopping Around for the Best Rate
Adding young drivers to your own policy can be expensive. Fortunately, some insurance companies offer better car insurance premiums.
Request quotations from as many insurance companies as you can. Doing this is quick and efficient since you can get quotes from over 40 insurance companies online. This is to make sure that you’ll get the most affordable option. This is also the perfect opportunity to compare coverage and discounts offered.
Insurance Coverage for Teen Drivers
Liability Coverage and Beyond
At the very least, your teenage driver must have the minimum amount of insurance coverage required by state laws. In Michigan, the requirements are as follows:
- Bodily injury liability: $100,000 per accident and $50,000 per person
- Property damage liability: $10,000 per accident
It’s also recommended for a young driver to have the following coverage:
- Roadside assistance serves as a safety blanket while your teen is on the road.
- Accident forgiveness helps you save money. Insurance companies will not increase their rates based on one accident.
When to Add Your Teenager to Your Car Insurance
Timing is everything. Add your child to your auto insurance policy when they pass their driving test and secure their driver’s license. It’s also highly recommended to inform your licensed insurance agent when your teen gets their learner’s permit.
Contact The Clark Office For Legal Advice.
A car insurance policy is also considered as a contract. The requirements for adding a young driver may vary between insurance companies. Document in writing that your teenager will be covered by your own auto insurance policy.
Set an appointment with a trusted Michigan personal injury lawyer like The Clark Law Office. Having someone with legal skills and experience can help you scrutinize the details of your auto policy.
Frequently Asked Questions
Still clueless about what happens if I don’t add my teenager to my car insurance? Here are some frequently asked questions that can further your understanding of this topic.
Can I change insurance companies if I’m not happy with the insurance costs?
Yes. You have the freedom to check other insurance companies if your current one is charging outrageous rates.
Can I add my teen’s car to my own policy?
Yes, you may if he’s a member of the same household. He should also fulfill the criteria set by your insurance company.
Do car insurance rates ever go down with age?
Rates tend to decrease over time and will become constant between 25 to 30 years old.
- What Happens When You Reject an Insurance Settlement Offer? - September 18, 2024
- Understanding The Impact: What Happens If The Cerebellum Is Damaged? - September 9, 2024
- What is the Speed Limit on Unmarked Roads in Michigan? - September 5, 2024