Parents that are watching their children grow up have some hard decisions to make when their kids start driving. Many parents automatically think they should add their children to their car insurance policies and others force their kids to get their own policy to teach them responsibility. Neither decision is one that is easily made. There are a lot of things to consider when thinking of insurance policies and kids.
Auto insurance companies love getting new customers or extending coverage to additional drivers. While they enjoy the additional revenue, they actually do think before quoting premium increases. Because young drivers have very little driving experience, they are a higher risk. While insurance companies like the additional money they make from these drivers, the risk is much higher on them than their parents.
What Parents Should Consider
When kids start driving, parents have to allow them time to drive and get experience. Some parents enroll their kids in a driver’s safety class so they understand the dangers of driving and learn how to drive responsibly. There are others that take their kids to an empty parking lot to slowly introduce their kids to driving.
No matter how the kids get their experience, they will eventually get their drivers’ licenses. The most responsible thing a parent can do when their child has their license is to get car insurance for them. There is nothing more financially frightening than a child driving a car with no car insurance.
Lowered Rates- Some parents are always looking for a discount. These parents should consider adding their children to their own car insurance policy because they may be eligible for a multi-driver discount. If these parents buy a car for their child to drive, they should ask about a multi-car discount as well. While young or new drivers are subject to higher rates, these discounts can help ease the financial burden.
Separate Car Insurance- Parents that want their kids to have their own insurance policy should take the time to press for as many discounts as possible for their kids. While they are young, kids are still eligible for specific discounts. Some of these discounts include good student discounts, safe drivers’ discounts and a discount for driving for a limited amount of time. Parents should press for these discounts to help ease the burden for the kids that have to pay for the insurance.
Premiums and Deductibles- There comes a time that parents will have to talk to their kids about the difference between premiums and deductibles. Every licensed driver should know that there is a relationship between the two. It’s during this conversation that parents and kids decide what amount is comfortable for both to pay. Let’s be honest, most young drivers will rely on their parents for financial help if they get into a car accident.
There are a lot of things to consider when it’s time to get insurance for a newly licensed driver. Parents automatically want to teach their kids responsibility without putting too much responsibility on their young shoulders. The best way to address the issue is with research, communications and a great insurance agent.