When a teen gets a driver’s license, it is important for them to get insurance. It is most common for parents to simply add teens to their already existing insurance plan and pay the difference. But when should teens get their own auto insurance? Ultimately it will come down to specific circumstances like affordability and life situations. But there are a few things to consider that are out of our control.
When should teens get their own auto insurance? Many different things can help determine the answer to this question.
When Should Teens Get Their Own Auto Insurance? | Rates
Adding a new driver to an auto insurance policy will undeniably raise the rates of any policy. While these costs are unavoidable, they can be offset by asking about good students discounts. Most reputable insurance companies offer good student discounts if the students are attending school and have a 3.0 GPA or higher. There is another thing to consider like homeowners insurance or renters insurance discounts that apply to auto insurance as well.
When Should Teens Get Their Own Auto Insurance? | Pre Bundled
Many adults have auto insurance and renters or homeowners insurance bundled to get bundle discounts with their insurance company. When parents add teens to their insurance policies, they will also get these discounts. Even if a teen isn’t on a parents insurance policy if the teen is insured with the same company and in the same household those discounts will extend to them as well.
When Should Teens Get Their Own Auto Insurance? | Risk
There is a risk when having a new driver added to an auto insurance policy, accidents. When someone is found at fault of an accident, auto insurance cost often go up due to liability. When a teen is added to a parent’s policy they add risk factors which come to a head if the teen is in an accident. No matter which way you go, adding a teen to your already existing policy or to your household, insurance rates will go up if that teen is found at fault of an accident. Unfortunately, there is no way to work around this and shouldn’t factor into when that teen gets his or her own policy.
When Should Teens Get Their Own Auto Insurance? | Actual Date
A new driver is considered a new driver for the first three years of driving or until the age of 26 years old, whichever comes first. This means that parents often want to keep teens on their policy for the first three years of driving, after that, the teen will not get hit with new driver fees on their own policy. But, as stated in the beginning, it is up to the parents when a teen should get their own policy.