Inside: Adding a Teen to Your Auto Insurance Policy: Is it worth it?. Collaborative post.
Auto insurance is as necessary as a car’s steering wheel; you can move the car around, but it’s going to be a disaster. Not only driving a car without proper liability coverage is foolish and financially irresponsible, but also downright illegal.
You can face heavy fines and some jail time for doing so. It is also known that auto insurance policies are expensive. So what’s the best thing to do when a kid in your family just got his/her driving license?
Having a driving license is not enough to drive a car. They need to have a car insurance policy. Now, if you are looking for the cheapest car insurance policy for teen kids, you might have a hard time finding one. There are a couple of reasons for that, which we will discuss later in this article.
So if you are considering adding a teen to your auto insurance policy, should you do it? Is it worth the extra premium? Let’s find out.
Why are Teens Charged More for Auto Insurance Policies?
The auto insurance sector isn’t filled with some “teen-hating” executives who want to make car insurance less affordable for teenage kids. To be honest, teens have created this situation for themselves.
Auto insurance companies calculate every possible risk of a person getting in a car accident and making an insurance claim before selling one to them. They do an extensive background check and look for driving records, past insurance claims, DUI charges, locality, credit score, and so many more. Whatever makes a person a “bad driver” or more likely to make an insurance claim increases the cost of the policy.
One of the most prominent factors in deciding the rate of auto insurance is age. Younger people (below the age of 25) pay the highest prices, especially if they are in the range of 16 to 20 years old. People aged 40 to 55 pay the least (when the age factor is considered).
This price hike is because of statistics. It’s not surprising that these teenagers who have a knack for breaking the rules, experiencing speed, and driving recklessly are the most common age group who get in car accidents. According to the CDC, people in the age range of 16 to 19 are three times more likely to be in a car accident than people above the age of 20. A taste for adventure added with minimal driving experience makes teenagers an auto insurance company’s worst nightmare.
This is the reason why auto insurance companies charge the most to people below the age of 20. But everyone learns to drive when they are 16 or 17, and if you want to drive, you need to have auto insurance. Is paying enormous amounts the only way? No. There’s one more way that can not only assure a great auto insurance policy for a teen but at the same time help in saving money.
Adding a Teenager to Your Auto Insurance Policy
If your kid just got their driving license but has no auto insurance policy, before you get them a separate policy, consider adding them to your auto insurance policy. Auto insurance companies understand that you are not the only person who will be driving the car. Your spouse or other family members can only take your car regularly.
This is why there is an option to add other members of your family as registered drivers to your policy. This ensures that if in case they get in a car accident while driving your car, your policy will cover the cost of repairs or any other cost associated with the accident relevant to the policies you have.
Adding your teenage kid to the policy will allow them to drive your (or their) car safely without having a separate auto insurance policies. This will increase the rate of your insurance premium, but that would still be cheaper than getting a separate policy. But you can offset the increased rate by getting a couple of discounts:
- Multiple Car Discounts
Almost every company offers some discounts if you get two or more cars insured by the same company. So if your teenager has a car, getting it added to your policy will get you a sweet discount. Talk to your insurance company about multiple car discounts before adding anyone to your policy.
- Good Student Discounts
Many auto insurance companies offer “good students” discounts (or something similar) for students who get good grades. The details here might vary from one company to another (what grades are required for the discounts, etc.). So contact the insurance company and ask about this discount plan.
- Defensive Driving Course
Auto insurance companies charge teenagers the most because of the high risk of accidents and lack of driving experience. But many companies are willing to “trust” these kids only if they pass a test. Usually called a “defensive driving” course or something similar (could be a course that the insurance company offers), these courses can greatly reduce the cost of auto insurance policies for your teenage kid.
Few Conditions
There are a few things that you need to know about some terms and conditions of adding someone to your auto insurance policy. Firstly, you must add your family members (who regularly drive your car) as registered drivers to your policy. While the auto insurance company will allow an insurance claim if a friend crashed your car, if your family member crashes it, your claim can be rejected (if they are not a registered driver).
Secondly, if the teenager (or anyone for that matter) crashes the car under the influence of drugs or alcohol, or drives a car without a license, or your permission, the insurance company will reject your claim. So make sure to follow all the rules so your kid can drive safely.