It is a bittersweet moment when the teen in your house gets their driver’s license. They are excited for the extra freedom they will have, yet you are a nervous wreck every time you hear the car start. Fortunately, there is insurance to cover the costs if they ever get into an accident. Unfortunately, this situation is not as simple as just adding them to your policy. There are variables you should explore, and situations for you to consider, to ensure that you and your teen are fully protected.
Typically, most parents add their teen to their own policy. While this may seem like the easiest solution when insuring a new driver, it might not be the best solution. For instance, if you keep your teenager on your policy and he or she is involved in a collision that ends up in a lawsuit, your assets could be at risk. Are you prepared to get the bill if your teen driver blows through a toll booth? You will if they are on your policy. Conversely, by getting your teen on their own policy, you must make sure that they are the title holder of the car they are driving. Can your teen be trusted with that responsibility? Are you sure they won’t go down to a dealership and trade it in for a pocket full of cash? These are questions and situations you, as the parent, must consider.
When shopping for a car for your teen, there are a few things you can do to help lower premiums. Older cars will usually provide lower premiums as opposed to the newest model on the lot. Obviously sport cars and any other type of high performance vehicle will make a fairly significant ding in your pocketbook. Your child can help you with premiums as well, programs such as good student discounts can help lower premiums for teenagers with a good academic record. It is also important to encourage safe driving habits as some insurers may lower rates after a year with no accidents, tickets or claims.
Last but not least, even the most careful driver and the most prepared parent still may find themselves in a very dire predicament when it comes to legal action. The best solution to cover any extreme situation is an umbrella policy. An umbrella policy provides coverage where your policy ends. Umbrella policies are fairly inexpensive and when compared to what they can save your family in the event of a lawsuit, they are priceless.
When it comes to insuring your teen driver, do your homework and you and your teen will come out top of the class!
