The Insurance Information Institute offers some advice on financial protection for parents whose teenagers are new drivers:
- Include your son or daughter in your own insurance policy: it is usually cheaper to do this than to get them a new policy under their own names. If they are having their own car registered under their name, you can use your same insurance company, and you may, as a result, qualify for a discount.
- Ask how they assign the new drivers’ auto insurance: ask them to give your new driver the least expensive auto insurance policy. In most cases, however, your young driver can only use the same car under the policy.
- Increase your liability insurance policy: basic liability insurance coverage generally is not enough in case of an accident. Therefore, if a teenager is found negligent in an accident and the damages exceed the amount of your insurance, you would be financially responsible and could be held liable for the amount of money that the insurance won’t cover.
- Increase your policy deductible: selecting a $500 deductible instead of a $250 deductible, or going from $500 to $1,000 may save you anywhere from 10 to 20 percent on your annual premium. You can use a part of this savings to increase the liability insurance policy.
- Compare prices: auto insurance costs may vary dramatically among insurance companies, especially for young drivers. You can research and compare prices to find the policy that fits best for you.
Follow these recommendations in order to get the best insurance coverage for your new, young driver.