Celebrating a 16th birthday is a milestone for most of us because it’s the age when you can legally get your driver's license. We beg and plead for a car for our birthday and we can’t wait to take our learner’s permit test as soon as possible. But while we were so giddy to get our hands on the wheel, our parents were scared out of their minds that their child will actually be driving. When your first child starts driving it can be overwhelming for parents, especially when it comes to Auto Insurance. Not only do you have to prepare your child for the responsibility of driving, you also need to prepare your auto insurance for the responsibility of your child’s driving.
So your child successfully passed their learners permit test, what do you do now? When it comes to your auto insurance, listing a young driver who only has their learners permit depends on the company you’re insured with. Some companies do not require you to list them on your policy until they have a full driver’s license while others want them listed as soon as they get their learner's permit. Ask your insurance agent about when you should add your child onto your policy - never assume, it could potentially result in your child not being covered!
Let’s say you go to add your child onto your auto policy and you think to yourself, how will this affect my premium? I’ll put it lightly and say your premium is definitely not going to decrease. If you think your child’s driving is scary just wait till you see how much your auto insurance could go up. While some insurance companies rate younger drivers better than others, you will still see a rate increase by adding them onto your policy. You can combat the increase in premium by inquiring about what student discounts your insurance company may have to offer!
Now that your premium has increased, you may be considering having your child get their own policy. While this may solve your problem, in most cases then not, a young driver having their own policy is far more expensive than staying on their parent’s policy. Keeping your child on your policy while they are still a young driver is a smart financial decision for your child. A common compromise in this situation is having the child pay their part of the premium to the parent so both parties save their pennies!
This rate increase will not last forever - although some parents are surprised at the age that their child is no longer considered a young driver. In the eyes of your insurance company, a person is no longer considered a young driver until they hit the age of 25. Typically their price will decrease when they have 3 years of driving experience or when they turn 21 but each insurance company and young driver are rated differently.
Preparing for and understanding the effects of adding a young driver to your policy is important to you and your child. Exploring this topic before your child is of legal age to drive could save your wallet and your stress levels! Don’t hesitate to contact your Insurance agent for questions you may have about adding your young driver to your policy - they are there to help you!