Teens and car insurance

Adding a teen driver to an auto insurance policy is expensive. According to DMV.org, teens present a bigger risk to those on the road than older drivers. Because of this, car insurance is expensive, whether for an individual policy or on a family plan.

Regardless of price, it is necessary that a licensed driver who will be driving has car insurance. Notifying your insurance provider as soon as they get their permit is a good idea.

Many parents who notice the significant increase in their insurance payments may begin to wonder when, or if, they should ever remove their child from the insurance policy. While other forms of insurance have age limits on how long a child can stay covered by their parents, auto insurance has no such rule, according to NASDAQ. Parents can keep their child on their policy for as long as they want.

Money matters
Of course, taking the teen off the policy is a sure way to reduce the rates. According to CBS News, the policy provider could re-rate the policy, resulting in a significant decrease in cost.

"Taking the teen of the policy is a sure way to reduce the rates."

However, some insurers don't allow parents to take their children off the insurance until the children reside at a different permanent address. This means that if a child goes to college elsewhere but continues to list their parents' address as the primary address, the insurance provider will likely say the child needs to stay on the insurance. This is because during breaks, the student is likely to come home and continue to use the car. Insurance providers often offer resident student and occasional driver discounts in these situations, according to DMV.org.

The resident student discount generally applies only when the school is 100 miles or more away from home and parents are certain the student will not be using the car frequently. If the college is closer, the insurance provider may require the child to stay on the policy.

If the child will not be driving the car at all, it is possible to get a driver excluded from the policy. However, once someone is excluded from a policy, they should not drive your car, even for a short time. According to Hood Hargett, an insurance agency, if an accident occurs while an excluded driver is using the car, the insurance will not cover any damages.

"An insurance policy won't cover an accident caused by an excluded driver."

On their own
If the child will be driving a car regularly, it is necessary that the owner of the car list them on the policy. This means that, if you want to take your child off your insurance policy, he or she will probably have the title of a car. There are two main ways this can be made possible: you or your child can purchase a car, or the title can be transferred to list a new owner. In either case, the owner of the car will have to have his or her own insurance policy.

If the driver is under the age of 25, this can be pricey. Between the ages of 25 and 65, insurance companies offer regular rates. However, according to DMV.org, outside of that range, prices are higher because the driver presents a higher risk.

Because of this, some parents choose to keep their child on their insurance until increased rates won't be a factor. Keeping the child on the insurance policy is cheaper than moving to a new one.

If the child attends college in another state, you should check to make sure the policy is valid in that state. Depending on the state's laws, a new policy might be the best way to go. According to esurance, if a driver is living and working in a different state, the car being used should be registered and insured in that state. An example of this could be if a child graduates from college and goes to another state to work.

Adding teenage drivers to an auto insurance policy is always going to expensive. When it comes time to decide whether to remove them from the policy, many factors can come into play. If the child is going to get a new policy, help him or her find the best insurance for their car by comparing rates on CoverHound.com.

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