Auto Insurance For Your Kids

Auto Insurance For Your KidsBy Glenn Lamb

Auto insurance can be very expensive for young drivers. Parents are often worried (with good reason) when a young adult reaches driving age. Here are some things that can help manage the risk and cost.
My opinion is that a young driver should generally not be given a car and insurance without cost or obligation. If the young adult has to work or make a significant household contribution they may have more respect for the privilege being granted. It could also be helpful to have a written agreement about your rules for granting driving privileges. In most states a parent can withdraw permission for the young adult’s driver’s license. This should be considered if the young driver shows recklessness. Many insurance companies have a young driver’s safety program. Your agent may have information on this. Your insurance agent may also be willing to consult with the new driver about how the family’s policy will be affected by an accident or ticket for the new driver. To help keep costs down it is very important for the new driver to avoid tickets or accidents. A couple tickets or accidents could result in the entire family's auto policy costs to be extremely high!
The largest factor to holding down a young drivers insurance cost is to have liability insurance only on the new driver’s vehicle. That would only be advisable if the cash value of the young persons vehicle is low and you can afford the cost of losing it. The type of vehicle driven can also make a significant difference. (In general the type of car the young adult doesn’t want will have the lowest insurance cost, for example a station wagon vs. a high performance sports car.) Most insurance companies give a discount if the new driver completes an approved safety course. There may also be a good student discount. Check with your insurance agent about available young driver discounts. If the rate for adding the new driver doesn’t seem reasonable you may want to shop rates from different companies. One item that you should not skimp on is the amount of liability coverage. THE STATE MINIMUM IS NOT ENOUGH PROTECTION! Consult with your agent and be sure you and the new driver have enough coverage.
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