Legacy Digest

Auto Insurance for Teen Drivers

Auto Insurance for Teen Drivers

Learning to drive is a rite of passage for teenagers, but for parents, having a teenage driver can be stressful and expensive. Your child will need auto insurance coverage as soon as they receive their driver’s license, and that coverage can be very expensive because of the higher risk posed by new drivers. Here are some important things to think about when purchasing auto insurance for a teen driver.

Determine Whether to Add your Child to your Policy or Purchase a Separate Policy

  • Check with your insurer to see how your premiums may be affected. Expect that they could rise dramatically; however, savings may be found through multi-vehicle and good student discounts.
  • If your child is driving an “old beater” that doesn’t require comprehensive or collision coverage, a separate policy, in some instances, may ultimately save you money.
  • Discuss your options with your insurance agent.

Is Your Teen Driving For A Living?

  • Most personal auto policies won’t cover a driver transporting goods or services in exchange for a wage.
  • If your teen is delivering pizzas, driving for GrubHub, Uber or Lyft, additional coverages are likely required that are even more expensive than a standard auto policy.
  • However, failure to disclose and pay for those coverages up front could lead to denial of claims later on.

Find Ways to Save Money

  • Consider vehicles with high safety ratings over sportier, more-expensive cars.
  • Think about raising your policy’s deductibles to take on more of the insurance risk yourself.
  • Reassess your need for collision or comprehensive coverage.
  • Explore usage-based insurance, which involves installing a device in the vehicle that monitors driving behavior and rewards good driving. It’s also a way to keep tabs on your teen’s driving.