It’s a rite of passage. Your teen has obtained his or her learner’s permit and can’t wait to get behind the wheel. You have your own reservations, not the least of which is what this will mean in terms of insurance.
The fact is, regardless of if your child has a permit or a license, they will need car insurance. In many cases the parent’s policy may be extended to cover the teen learning to drive; however, don’t assume your teen is covered under your auto policy until you’ve spoken with your insurance provider. Be sure to keep these things in mind when getting a car insurance policy for your teen:
Notify your insurance provider
Once the permit is obtained, be sure to alert the insurance company before your teen gets behind the wheel. Otherwise, if there is even a fender bender you may find yourself forking over big bucks for a loss you erroneously assumed was covered.
You can get a separate car insurance policy with a permit, and in certain circumstances you might have to. This is another topic you’ll want to discuss with your insurance company.
By double checking with the company on this at the start, you enable your insurer to consider any special circumstances that may require your teen to purchase a separate learner’s permit insurance policy. If the teen owns the vehicle with his or her name on the title only, it is likely that separate insurance will be a must even with just a learner’s permit. In addition, it enables you to start the conversation with the insurance company about how best to cover your teen once the full license is obtained.
Choosing the right car for your teen
Typically, a car insurance policy will cover a car and not necessarily whoever is driving the car, so one thing you want to determine early is the type of car your teen will be driving. Whether you plan on buying a new car for your teen or using a car that runs in the family, you’ll want to choose one with a high safety rating, and preferably not as flashy or luxurious. A new driver behind the wheel of a practical family vehicle may be less likely to speed than someone learning on a muscle car, built to go fast – something insurance companies recognize. So if you have options, pick the car that has the lowest insurance rates to help with the rise in premiums.
How does a new driver affect your car insurance?
The fact is, when your teen becomes a licensed driver and is added to your policy, your rates could increase significantly. According to the Insurance Information Institute, adding a teen boy to an insurance policy could send your rates up as much as 100%, while adding a teen girl could mean a 50% increase. The size of the increase may vary by state.
Families can reduce or prevent extra costs in some cases. For example, Nationwide offers a good student discount for drivers age 16-24 who maintain a B average, and its accident forgiveness program ensures that rates won’t rise following the first at-fault accident on your policy.
So, when your teen comes to you with learner’s permit in hand, embrace the rite of passage knowing that you have already looked down the road ahead.
Driving on the open road is no doubt a new and exciting experience for your teen. A family driving contract may be able to help you set expectations and goals for the new driver in the family.