Kids And Auto Insurance: Who's Covered?

If you have a child who is learning to drive, you may be wondering if they are automatically included in your auto insurance policy. The answer is that it depends on your insurance provider and the specific terms of your policy. In some cases, children may be covered under their parents' policy until they obtain their driver's license, while other companies may charge for a teenage driver as soon as they earn their license. It is important to review your insurance portfolio and consult with your insurance provider to understand the specific coverage for your child.

Generally, if your child lives with you and has access to your vehicle, they will need to be added to your auto insurance policy once they obtain their license. This is a legal requirement in most states, and driving without insurance can result in serious financial and legal consequences. Adding a young driver to your policy can be expensive, with premium increases ranging from 50% to 100% due to the higher risk associated with inexperienced drivers.

However, there are benefits to adding your child to your policy, such as lower premiums compared to standalone policies, access to discounts for good students and safe driving courses, and simplified policy management. It is also important to note that drivers under 18 are typically not allowed to purchase their own insurance policies, so adding them to your policy is usually the only option.

When to add your child to your car insurance policy

If your child is a licensed driver and lives in your household, you will need to add them to your car insurance policy. This is because insurance providers require you to list all licensed drivers in your home on your auto insurance policy. Driving without insurance is illegal in most states and has legal ramifications if caught.

You should add your child to your car insurance policy when they pass their driving test. However, it is advised to notify your insurer when your child gets their learner's permit, as some insurance companies require that you add your child to your policy once they have their permit. This way, you can avoid any gaps in coverage between your child passing their test and being able to drive your vehicle legally.

If your child has their driver's license but doesn't plan on driving for the foreseeable future, you can likely opt to formally exclude them from your car insurance policy. You will need to sign a document stating that they will not be driving any of your insured vehicles, and you must stick to this agreement. If your child moves out and gets their own vehicle, they are responsible for getting their own insurance coverage.

The cost of adding your child to your car insurance

Adding your child to your car insurance policy is a requirement in most cases. If your child has a driver's license, lives in your household, and drives a car registered to your home, they will need to be added to your car insurance policy. This is true even if they are over the age of 18, as anyone living in your household with access to your cars will need to be a listed driver.

The cost of adding a teenager to your car insurance policy can increase your rate from 70% to 150%, or even up to 161%. The average cost for adding a teen driver to your policy is $3,726 annually. The cost varies by state, with the District of Columbia having the highest average cost of $6,473, and Hawaii having the lowest at $1,565.

While adding your child to your car insurance can be costly, it is generally more cost-effective than having them take out a standalone policy. There are also benefits to adding your child to your policy, such as lower premiums for your child, the ability to monitor your teen's driving, and qualifying for new discounts. However, it is important to note that adding a young or inexperienced driver to your policy can increase your premium significantly.

The consequences of not adding your child to your car insurance

Failing to add your child to your car insurance can have several consequences. Here are some key points to consider:

Financial Risk

If your child is not listed on your insurance policy and gets into an accident, you and your child will be responsible for paying for any injuries or property damage caused. The financial consequences of an accident can be significant, and your child may also face legal penalties and lose their license.

Policy Cancellation

If your insurance company discovers that you did not disclose your teenager as a driver, they may cancel your policy and deny any claims. Driving without valid insurance is illegal and can result in serious consequences.

Higher Premiums

Adding your child to your policy will increase your premiums, but the increase will be more significant if they are not listed and are involved in an accident. Insurance companies consider young and inexperienced drivers to be high-risk, and the cost of insuring them reflects this.

Inability to Obtain Separate Insurance

Minors are generally unable to obtain their own insurance policy. Insurance policies are legally binding contracts, which minors cannot sign. Therefore, if your child is not listed on your policy and needs to drive, they may be unable to obtain the necessary insurance coverage.

Impact on Credit Score

If your child is involved in an accident while uninsured, it can negatively affect their credit score. This can impact their ability to access loans, rent an apartment, or even get a job in the future.

Difficulty in Future Insurance Applications

If your child has an accident while uninsured, it can make it difficult for them to obtain insurance in the future. Insurance companies may view them as high-risk and either deny coverage or offer policies with extremely high premiums.

In conclusion, it is essential to add your child to your car insurance policy if they plan to drive. While it may result in higher premiums, the consequences of not doing so can be much more severe and impact your child's future financial well-being and driving privileges.

Discounts to help reduce the cost of adding your child to your car insurance

Adding a child to your car insurance policy will likely increase your premium, but there are discounts available to help reduce the cost. Here are some of the most common discounts to help lower the cost of adding a child to your car insurance:

• Good student discount: Many insurance companies offer a discount for full-time students who maintain good grades. For example, Allstate offers a discount to unmarried drivers under 25 who have at least a B- average, while State Farm offers up to 25% savings for students with good grades up to age 25 or their last year of school.
• Driver training discount: Some insurance companies offer a discount if your teen has taken a driver training course or a defensive driving course. For example, Geico, State Farm, Allstate, and Travelers all offer a premium discount upon completion of a driver safety training course.
• Distant student discount: If your child attends college more than 100 miles from home and doesn't take a car, many insurers will offer a discount, ranging from 5% to 35%.
• Multi-vehicle discount: Adding another car to your policy may make it eligible for a multi-vehicle discount.
• Telematics discount: Insurance providers often offer telematics programs that reward safe driving practices with a discount based on a driving score determined by a smartphone app or plug-in device.
• Low-mileage discount: If your teen drives a low number of miles each year, you may be eligible for a low-mileage discount.
• Family plan discount: You may be able to get a discount if your child is 21 or younger and still lives at home and is on your insurance policy.

The process of adding your child to your car insurance

Adding your child to your car insurance is a simple process, but it can be costly. Here is a step-by-step guide on how to add your child to your car insurance policy:

Step 1: Review Your Current Coverage

First, get familiar with your current policy's terms. This will give you an idea of what additional coverage you might need when adding your child to the policy.

Step 2: Gather Your Teen's Details

Your insurance provider will want specific information about your child, including:

• Their full name and date of birth.
• Their Social Security and driver's license number.
• Details of their driver's license (number and issuance date).
• Any notable points from their driving history, such as accidents or traffic violations.

Step 3: Contact Your Insurance Company

Get in touch with your insurance company or agent to inform them that you are adding a new driver and provide the necessary information. Don't forget to ask about potential discounts for young drivers, such as good student discounts or discounts for completing driver's education courses.

Step 4: Discuss Your Teen's Primary Vehicle

Your insurance company may want to know which car your child will be driving most often, as this can impact the cost of your insurance coverage. Research the cheapest cars to insure for teenagers before deciding on a vehicle for your teen. If they have their own car, be prepared to provide its details, including the Vehicle Identification Number (VIN).

Step 5: Explore Coverage Options

Discuss with your insurer the best coverage options for your teen, taking into account their driving habits and the type of car they will be driving. Consider adjusting deductibles to balance out any increase in premiums. Request a quote to understand how your premium might change and make adjustments as needed.

Step 6: Finalize and Receive Updated Documents

Once you've finalized the details with your insurer, they will send you new insurance cards and an updated policy document outlining your teen's inclusion.

Remember, as your child gains more driving experience, the cost of your insurance coverage will likely decrease over time. Regularly reviewing your policy can help ensure it remains aligned with your financial and coverage needs.

Frequently asked questions