What's the Best Way to Insure a Teen?
What might surprise you is that the best way is sometimes the cheapest way too. First a statistic:
Teen drivers make up only 11% of all drivers, but are involved in 20% of all accidents. New drivers need time to gain the experience that helps them avoid accidents. That's why they cost so much to insure. So we know why their insurance is expensive... how do we get their insurance rates as low as possible?
Some parents are tempted to buy the teen their own policy. The problem with this strategy is that in order to make it affordable, their teenager is forced to buy a stripped down policy - usually just state minimum coverage. Even when stripped down, it won't save the parent any money and could leave the teen with little or no coverage after an accident.
The best and usually cheapest way to insure a teen is to add them to their parent's policy. Parents qualify for better rates based on credit score, home ownership, prior insurance, and multi-car discounts - most of these discounts, the teen will not qualify for. In addition, parents usually have higher coverage compared to what their teen could buy on their own. So if your teen gets into an accident, there's more liability and uninsured motorist coverage to compensate your child, if they were to get hurt in the accident. Chances are if the teen is under eighteen years old, the parents would be liable anyway.
Lastly, by putting the teen on the parent's policy, he or she would be eligible to drive any car in the household - not just the one they are rated on. Embrace the fact that your teen is driving - just make sure they have enough coverage by adding them to your policy.
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