Do I Need to Add My 16 Year Old to My Auto Insurance Policy?
Teens between the ages of 16 to 19 have the highest rate of car accidents, according to the California Department of Motor Vehicles, with unsafe driving speed being the most common cause of the accident. Inexperienced drivers do not yet have the kind of safe-handling skills older, more experienced drivers posses and are more prone to taking risks. Insurance professionals urge parents to include licensed teenagers on their policies and to bump up insurance limits for these high-risk drivers.
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Time Frame
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Teenagers and adults issued driving permits prior to receiving a license do not need to be added onto an insurance policy as a rated driver, regardless of age. It is recommended policyholders notify the insurance carrier of a teen's permit status and have the minor listed as a non-rated driver on the policy until licensed.
Significance
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Insurance carriers have access to motor vehicle reports listing all licensed drivers at the garaging address. Discovery of licensed family members not listed on an insurance policy can prompt underwriters to rate the driver on the most expensive vehicle in the household.
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Types
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Policyholders should discuss which vehicle the youth will be rated on with the insurance agent prior to policy inception. Young drivers using only a specified vehicle in the household--such as a liability-only clunker--can be rated on the car they drive regularly.
Features
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Licensed teenagers sharing a vehicle with a parent will be rated as the main driver, even if only occasionally allowed use of the vehicle. Some insurance carriers will allow two teens sharing one vehicle to be rated on the same auto. This can save premium dollars in the long-run, as only one is rated as the main driver.
Considerations
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Bumping up liability limits when adding a young driver to a policy can protect parents from potential lawsuits that stem from accidents caused by an inexperienced driver. Those with inadequate health insurance coverage can also add a medical coverage expense to protect those in the vehicle, including family members, passengers and the teenage driver.
Potential
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Discounts are available through many carriers for good students with a grade point average of B or better, which can greatly reduce premiums. Some major carriers offer teen safe programs to permitted drivers prior to receiving a license, which can also garner a discount.
Warning
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Not listing regular, licensed drivers on a vehicle insurance policy can later lead to claims problems in the case of an accident.
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References
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- Photo Credit teenager image by Andrzej Solnica from Fotolia.com
