A Parent's Guide to Auto Insurance for Teenagers

image: hawaiicars.com

Hey, this is Jeremy from Shine Insurance and our article today is all about the six steps of insuring young drivers. So, whether you're a young driver trying to figure it out or you're more likely a parent thinking about adding your kid to your insurance policy or maybe you've had your kid on your policy a while and you just have questions about the parts of the process like what you need to do at this given point.

We're gonna address all of that in this article. We're gonna talk about the timeline for ensuring your child from getting their permit, kind of the very first part of it,all the way through moving out the end of the process,we're gonna dig into that right now. Let's start with your kid getting a permit. That's the first step in driving.

cheap cars for college students

This is when they're allowed to drive your car but they're not yet a licensed driver. So, they can drive when you're in the car,always scary a little bit when you first let them drive and you're teaching them how to drive during this process. Generally speaking, most insurance companies do not require you to add a driver at this point. When they have a permit, you don't yet have to be rated for them, pay the additional premium that you're gonna see when they are a licensed driver.

You don't have to do anything when your kid is a permitted driver, obviously, as long as they're driving under the rules of their permit. So, there isn't really much you need to do when it comes to the permit, but I would definitely ask your agent to make sure that's true. Every insurance company is different,the insurance companies we work with work one way,the insurance company you're
working with may work another so you wanna check in and make sure that is the case for you as well.

It might be a good time to have your agent give you a quote for adding a young driver. Sometimes, it can be startling how much your premium is going to change when your youthful driver gets their license and so now it might be a good time to look at that and try and figure out what the prices going
to change when your kid actually does get their license. Now, when they get their license,you need to add your child to your insurance policy as a rated driver.

This is when they'll be added to your policy officially,they can drive on their own now. And so, we are going to rate them from the insurance company perspective on the policy. And you wanna make sure that's the case. You certainly don't want your licensed driver to get in an accident or have something bad happen without them named on your insurance policy.

That's what you wanna avoid and so you wanna add them the day they get their license to your policy. As far as price goes, this likely will double the price of at least one car on your policy. So you wanna be prepared for the change in premium that will happen. Some of the ways you can help that is definitely ask for the Good Student Discount. For some insurance companies,that can be hundreds of dollars,it's a huge discount, an important one.

So, as your kid is getting closer to getting their license,you certainly wanna make sure that they are getting good grades,and then when you put them on your policy,you can get that discount which is a significant discount. As far as another way to keep the price down,really, the best way to keep the price down is if it's possible to rate them on a car that does not need full coverage. So, an older car that doesn't need coverage for physical damage to that car itself,you can cut the cost pretty much in half if you don't have that coverage on the car.

Now obviously, you want your kids in a safe car,not an old, beaten-up car necessarily,so you've gotta balance those things and figure out how to balance the cost of insurance with the safety of the car that you're letting your kids drive. But if you do have an older car that you can rate your kid on, that's one of the best ways to keep the price down. So your kid is licensed, they've been driving for a couple of years, and now they're leaving for college.

This is another time to contact your insurance agent and you may need to adjust the insurance policy,particularly if they're leaving for college and going further than like 50 miles away. If they're not taking a car and they're going 50 miles away,there's actually an additional discount that a lot of insurance companies have for a student away from home because they don't have a car with them for most of the time,if they're on a college campus, they're not driving as much so there's a discount on your insurance to relieve some of the cost of premium associated with them. You don't wanna remove them from your insurance policy but you may be able to add a discount for them being further away.

Generally, if they're within 50 miles of the home,even if they are on campus and not driving the carvery often, the insurance company isn't going to give you that discount. Again, that's a conversation that you would want to have with your insurance agent. And even if they did take a car with them to the college campus, it's likely that the insurance company would want to adjust the policy a little bit to note that that car is in maybe a different state sometimes or in a different place and make sure that the policy kinda knows where that car is,where it tends to be garaged is the official word,even though it doesn't have to be in a garage,but where is the location of that car and where does it tend to be.

Okay, so your kids have been going through college and now, they have graduated from college. This is a big point in obviously your life and your kid's life, but also in the insurance life associated with your auto insurance. At this point, it may be time to remove your child from your policy and have
them on their own policy.

Really depends on the scenario as things move forward. Basically, your child should get her own policy when one, she no longer is a full time student. So, all the way up through being a full time student,even if they're away at college, they're not living in the house necessarily, but they are a full time student,you should still keep them on your insurance policy,that tends to be the best price way to do it and the best coverage way to do it.

But when they're no longer a full time student,it may be time to move them off of your own policy and definitely if they're no longer a student and they no longer live in your home,you absolutely should have them off of your policy at that point and on to their own insurance policy because it's actually a bad idea to have them on your own policy if they're not a full time student and they don't live in your home.

There's some coverage stuff that, I can into details but that's not really for this article necessarily,but there are some specific coverages that are missing if your child doesn't live in your home and is not a full time student but you still have them on your insurance policy, that can be bad. So if those two things are true,they don't live in your home and they're not a full time student, you want to have them out on their own insurance policy.

A lot of times in this situation, you still own the car. The car is still in your name but they're not in college anymore and they don't live in your house,at this point I would definitely encourage you to get your name off of that car even if you have to sell it to your kid do for a dollar or something. It's time to separate your insurance,incredibly important, not only for your own liability exposure, if something bad happens because of them, you want your self separated if you can,also for their own coverage making sure that they have the coverage that they need.

So, even if you've got to sell it for a dollar,sell that car to your kid, get it titled in their name,all that kind of stuff. And finally, celebrate. You have been paying crazy, expensive auto insurance prices for way too long since your kid was 16 or 17 all the way up to probably they're 21 now, 22,something like that, and you've been paying these higher insurance prices and when you get your child off of your insurance policy,that price will go down and you'll see some relief when it comes to insurance pricing so you wanna celebrate that and enjoy that process.

Okay, so what we learned in this article was the timeline for insuring your child from permit through moving out. Hopefully, you learned something about the process,about what to do at what different points. If you wanna watch some other videos on our channel,there's a couple here, one is how an independent insurance agent works.

We at Shine are independent agents,they're different than other kinds of insurance providers and we'll explain in that article exactly how that works. And then we have a whole playlist for really information about home and auto insurance details. If you wanna dig in to the details of exactly how home owners insurance and auto insurance works,check out this playlist, it's a playlist of about 10 videos that we'll dig into the details and you can see that as well.

Okay, as always, the last steps in our video is to please share this video if you know other parents that are going through the process of dealing with their kids on their insurance. Share this article with them so they can learn as well and please do subscribe to our channel so that you can get the next videos we'll put as quickly as possible. Alright, until the next time, I'm Jeremy and I hope you have a wonderful day.

Subscribe to receive free email updates: