Considering a Separate Policy for Your Teen? Officer Poer’s Teen Driver Safety Article: Should Your Teen Drive During Family Vacation?
Occasionally parents who have new teen drivers in their household ask me about the pros and cons of placing their son or daughter on a separate policy. This usually is a reaction to learning how much their premiums are going to increase when they add the child to their policy. They think by separating the teen and his car from their other vehicles, they’ll pay less in premium.
While there may be circumstances where this should be considered, normally I advise them NOT to do so. When you separate the teen and his car from the rest of the family, assuming the family has a good driving history, you’re going to end up paying an even higher premium on the teen driver’s car because it won’t qualify for any of the discounts you may qualify for on your other policies, such as a multi-car discount (can be up to 25%), a home/auto discount, or your good credit discount.
Additionally you will have to buy insurance from a ‘high-risk’ insurer. These companies typically charge rates that are more than double the rates of a standard carrier.
But that is only part of the problem. The bigger issue is that you typically can’t buy limits that are high enough for a teen driver from ‘high-risk’ insurance companies.
If your child causes an accident that exceeds these limits, you will most likely be personally sued by the injured parties. In most states, as long as your child is considered a dependent, you will find yourself potentially liable.
Another potential problem with titling a car in your teen’s name and placing him on a separate policy is the potential confusion about coverage when another family member drives the teen’s car. If this is done on a regular basis, and the family member is not a named insured on the teen’s policy you could unknowingly have gaps in your coverage.
The smartest way to insure your teen driver is on your policy with the highest liability limits available. Depending on your financial situation, you probably should also have an umbrella.
Call our office and we’ll be happy to discuss your particular situation and find the best rates and coverage for you and your family.
Compliments of Your Local Family and Teen Driver Protection Specialist –
President & CEO
Oklahoma Insurance Group, Inc.
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