When a young driver first gets their driver's license, it can give them a new found sense of freedom and independence. But when it comes to insurance coverage, how independent should they be from their parents or guardians?
If you have a new or recently licensed teen driver in your household, you may be wondering the best option to insure them while they’re on the road. As teenage drivers will need to be covered by an insurance policy in nearly every state, it is important for you and your teenage driver to understand your coverage options and restrictions.
At Berry Insurance, we’ve had clients ask us about the potential of teens receiving their own auto insurance policy and if it makes more sense than keeping them on a parent or guardian’s policy. With Berry team members having teen drivers themselves, we can understand wanting to ensure the best for your child. In this article we’ll answer all your questions regarding coverage for young drivers and what option is best for your household.
Should teen drivers get a separate car insurance policy?
When asking this question, policyholders typically believe that insuring their teen separately will help them save money on their own premium and reduce potential liability on their part if their teen is involved in any accidents.
However, in most cases we would recommend against teenaged or young drivers getting their own auto insurance policy separate from the policy of their parent or guardian. Adding young drivers to your existing auto insurance policy is often more affordable and simpler than going through the process of having them sign up for their own policy.
The only situation where your child may require their own separate policy is if they own a vehicle in their own name. Because the vehicle is solely owned and operated by them and not jointly with you, insurers may not wish to insure their vehicle on your policy. This is because, to insurers, the primary policyholder would not have “insurable interest” in the vehicle.
Receiving a separate insurance policy for your teenage driver can be difficult and expensive, as insurance carriers may not be eager to insure a driver they deem inexperienced or a potential risk - as young drivers are frequently involved in accidents or traffic violations. Also, state regulations where you live may have restrictions on the age in which a driver is able to have their own policy. For example, drivers in Massachusetts must be 18 years of age to qualify for their own auto policy. If a teen or young driver does get their own policy approved, you can expect a higher policy premium, again due to experience and being seen as a potential risk.
Adding a young driver to your policy is easy to do and gives you the convenience of only managing a single policy that allows members of your household to be covered while operating any vehicles insured on the policy.
How much does car insurance for teen drivers cost?
Let’s face it, newly licensed drivers are still learning the ropes and the rules of the road, and will have a higher tendency to speed, tailgate, or drive distracted. Because of this, if a standalone auto policy for a teen driver is approved, it would likely be more expensive than a standard policy. The driver’s inexperience is just one factor that will influence cost, alongside the ZIP code, vehicle type, how much they drive, and more.
To learn more about everything that goes into determining the price of auto policies, check out this article: How Much Does MA Car Insurance Cost?
How much does it cost to add teen drivers to my policy?
While adding a new driver to an existing policy will be cheaper than acquiring a separate policy, it is true that you can expect to see an increase in your premium when adding an additional driver onto the policy.
However, there are still ways that you can save money on your policy when adding new drivers. Insurance carriers often offer discounts for teen drivers who complete drivers ed courses, receive good grades in school, and maintain safe driving records.
Also, the rate increase you will see after adding a new driver is typically only temporary, as it will decrease as you child ages - growing more experienced and hopefully proving themselves as a safe driver.
Consider adding umbrella insurance
While you’re already updating your policy for new drivers, consider adding additional coverage through umbrella insurance.
Sometimes known as excess liability or personal liability, umbrella insurance supplements your existing liability coverages by adding extended coverage. This protects you in the event you are involved in accidents involving property damage or personal injury.
With the increased risk that comes with adding a new driver, having the additional coverage offered by an umbrella policy can be the best way to ensure you’re prepared for any potential claims.
Coverage for the whole family
Berry Insurance understands that you want to ensure the best coverage for your family at the best price. Now that you know more about your insurance options and if you should add your teen driver to your policy, you can make the best decision for you and your household.
Wondering if you will need to update your auto policy if your child is away at college or university? Check out our article explaining whether or not you should exclude your child from auto insurance coverage while they’re at school.
If you’re interested in even more ways you can save after adding a new driver on your policy, check out this guide: 13 Ways to Save On Your Auto Insurance.
