If you're the parent of a teen who recently got their driver's license or who is about to get their driver's license, you probably have any number of questions and worries. One area that tends to concern many parents is the issue of insuring their new teen driver. Take a look at a few important things that you should know about auto insurance for your teenager.
There's A Good Reason Why Teen Insurance Is Expensive
When you're researching insurance rates for your new teen driver, you may get sticker shock when you see the prices. It can seem unfair to have to pay such high rates, especially if you're a driver with a good record who normally pays a pretty low rate. However, there's a good reason why it's so expensive to insure a teenage driver: statistically, they're pretty bad drivers.
According to the CDC (Center for Disease Control), teenage drivers make up only 14% of the driving population, yet they account for 30% of the traffic accidents. A NIH (National Institute of Health) study followed 42 teen drivers and their parents for 18 months. In that time, the teens racked up 37 accidents, while the parents studied only accounted for two. In short, teens are a big risk to insure, and the insurance companies charge accordingly.
To help bring the rate down, you will need to find ways to make your teen's driving experience safer. Put them through a driver's education course. Choose a car for them that has high safety ratings. It shouldn't be a new car, but it should be new enough that it has plenty of safety features, and you should add on optional safety features wherever possible. The safer the car is, and the more prepared the teen is, the lower the rate will be.
Noncustodial Parents May Need Insurance Too
If you're divorced, the teen insurance issue may take on a new wrinkle: who should insure the teenage driver? It's a pretty good bet that if you're the teen's custodial parent, you will need to add them to your insurance. But what if you and your ex split the time equally? What if you're the noncustodial parent, but you allow the teen to drive your car when visiting, or the car that the teen drives exclusively is in your name?
The answers all depends on the policies of the insurance company that you use, and each one has their own ways of dealing with the issue. For example, some require the parent with whom the teen spends the most time to carry the insurance, and others ask that the parent that the teen lives with while attending school carry the insurance. In some cases, both parents may need to add the teen to their insurance. Your best course of action is to inform your insurance company that you have a teen driver and ask them what their policy is for divorced parents.
Should Your Teen Ever Buy Their Own Insurance?
Some parents want their teens to pay their own way. You may, for example, require your teen to earn the money for their first car on their own. You may also consider having your teen pay for their own insurance. But should they have their own insurance policy?
Generally speaking, it's not a good idea for a teen to have their own policy. For one thing, teens generally can't enter into any kind of contract without a parents' permission, and some insurance companies won't sell a policy to an underage driver alone. Even if you find an insurance agency that will sell your teen their own policy, in most cases you're legally liable for any damage done by your minor child. That means that if your teen purchases the minimum policy required by law, then gets into an accident that causes damages beyond what the insurance company will pay, you'll be on the hook—and your insurance won't cover it because the teen isn't on your policy. If you really want your teen to pay their own way, add them to your policy and then have them pay you directly for their portion of the cost.
Finding the right insurance policy for your teen is important. Make sure to shop around and consider a variety of products so that you can choose the best coverage for your new driver. Companies like McHugh Insurance may be able to help.