This is a common question I get when speaking to parents of teen drivers about their car insurance. Unfortunately, many parents are advised to do this either from a friend or an insurance agent that doesn’t know what they are talking about. They think if they place a teen driver on a separate car insurance policy, the rates for their other cars won’t go up.
Yes, that part may be true, but the rate for the teen driver’s car goes way up sometimes as much a 3 times higher. This happens for 2 reasons. First, there won’t be a multi-car discount for the single car on the teen’s car insurance policy and second, you will have to buy a policy from a “high-risk” insurer. “High-risk” insurance companies charge rates that are more than double the rates of a standard company.
And if that isn’t reason enough to add your teen to your own car insurance policy, here’s another.
It can cost you much more than insurance premiums if your teen causes a car accident!
The most dangerous problem insuring your teen with a high-risk insurance company is that you can’t buy limits high enough for a teen driver. The liability limits offered by these companies are usually no higher than 100,000 per person, 300,000 per accident for bodily injury and 50,000 for property damage.
Some parents think that’s fine- that they will only sue their child’s insurance company if there’s a big claim. Wrong– a good attorney will go after the parents too. As long as the child is living in the parent’s home or is a dependent, any good attorney will drag you into the lawsuit.
There is something you should know about auto liability for teen drivers. A teen driver is 5 times more likely to cause an accident and the cost of their claims are 3 times higher that an experienced driver. That means your teen is at high risk of causing an accident and the cost of the claim can be much higher leading to the need for higher limits for bodily injury and property damage liability insurance.
If your teen only had liability limits of $100,000 per person, $300,000 per occurrence for bodily injury and $50,000 for property damage, what would happen if your teen caused an accident where someone driving a new BMW was seriously injured and had medical bills of $250,000? You are going to get sued!
The smartest way to insure your young driver is too insure them on your auto insurance policy with the highest liability limits you can get. It is also recommended that you carry a personal liability umbrella with a million dollar limit. This is the least expensive way to protect your assets from a lawsuit.
For a personal protection risk assessment, call 866-869-3335 and we’ll help you get the right insurance protection for your family at the lowest cost.