When Steve Rosevear turned 16, he asked his parents if he could apply for his learner’s permit and be added to their existing auto insurance. His family lives in Amesbury, Massachusetts, a small city in Essex County that lies across the Merrimack River and is one of the two northernmost towns in the state.
Steve’s parents faced a conundrum: would it be more economical to add their son to their existing car insurance, or get him his own policy?
While adding teenage drivers to an existing policy can result in higher insurance rates, in many cases this route remains cheaper than getting them a separate policy. After all, most insurers give discounts to families who insure multiple cars and/or carry car and home insurance with the same company.
Since the Rosevear family had their car and home insured by the same company this already earned them a discount, so adding their teenage son was more economical than getting him a separate policy.
In some cases, it might be more ideal to get your teenage driver a separate policy and skip optional coverages such as comprehensive, rental reimbursement, rental car, and towing coverage. This is particularly true if your child drives a low-value vehicle.
However, bear in mind that state laws require all drivers to carry liability insurance to cover car accidents in which they are at fault. It specifically covers the cost of property repair and medical bills resulting from injuries.
Most states have a minimum requirement for the amount of liability insurance coverage each driver must carry, but if you can afford it, most financial experts believe that it is often a good idea to go above your state’s minimum requirement as it will provide additional protection in the event of a vehicular accident where you (or your child) are found to be at fault.
Before you add your teenage child to your existing policy or obtain separate coverage for him or her, it always makes sense to first compare insurance quotes.
Steve’s parents called their insurance agent to learn if their son was eligible for discounts or if they could adhere to certain rules that would result in lower premiums. The advice they got is listed below.
Their car insurance company offers good student discounts. Insurers rely heavily on probability and statistics pertaining to risks, with studies suggesting that teenage drivers with good grades are less likely to engage in risky driving behaviors. Fortunately for Steve’s parents, their son was an A /B+ student.
Most auto insurance issuers offer good student discounts to drivers younger than 25 who are enrolled in school full-time and have GPA of at least 3.0.
Their auto insurance offers discounts to students who graduate from certified driver-education schools.
Obtaining the best auto insurance rates is possible if the family vehicle is fitted with enhanced safety features (e.g., crash protection and larger, sturdier body). Meanwhile, sports cars designed for speed, SUVs, and trucks are generally excluded from special discounts.