It’s scary enough when your teenager begins to drive – and as a single parent, it can be a bit tricky to determine where the responsibility lies when it comes to insuring them. Whether your child is living with your former spouse or is away at school, you should talk to your insurance company to determine whose policy your teen should go on.
Here are a few questions to be prepared for when talking with your agent:
- Who has custody? – Some insurance companies mandate that whoever has custody of the child while they’re attending school is responsible for the policy. Others suggest that the parent who has the child a majority of the time should cover them under their policy. Depending on which company your insurance is through, your child may also need to be named on both parents’ policies.
- Do you and your ex-spouse have the same insurance company? – If both of you have auto insurance through the same company, your child may be automatically covered under both policies. This is because some insurance policies define “the insured” as someone related to you by blood, marriage, or adoption who is a resident of your household.
- Who has the best driving history? – This can also be a deciding factor in whose policy your child should be covered under. If you or your former spouse have a poor driving record, this could increase the cost of your premium significantly. In this case, it may be best to have the other parent add your teen driver to their policy.
- When does your teen’s coverage need to begin? – Make sure you notify the insurance company at least a few weeks before your teen gets his or her license. Even if you’re still deciding which policy they should be covered under, it’s important to have them covered in the interim – not doing so could cost you quite a bit of money if they’re involved in an accident. Not listing them also gives your insurance company the right to cancel your policy for misrepresentation. Make sure their coverage starts a few days before they’re ready to drive.
After you’ve determined whose policy your teen driver should be covered on, plan a time to talk with your former spouse about coverage options, safety issues, and related costs. Although this may be an uncomfortable conversation, there are many important things you should discuss:
- Decide between individual vs. existing policy – Most times, adding a child to your existing policy is best, rather than getting them their own. However, if you or your former spouse has a history of accidents or an overall poor driving record, it might be best to get them an individual policy.
- Check back every six months – When your policy comes up for renewal (usually every six months), take a look at other companies to see if you can get a better rate. At this point, your current company may also give you a loyalty discount if you stay with them.
- Switch the insured person – Some companies let you assign drivers to a specific car. To save money, list your teen as the driver of one of your older cars.
- Increase your deductibles – When you add a teenage driver to your policy, consider increasing your deductible. This can significantly lower your premium, so you can use your insurance in the unfortunate event of an accident, rather than on small things that you can pay out of pocket.
- Take your college student off the policy – If your teen driver is away at school without a car, consider taking them off your policy so you’re not paying that unneeded cost. Make sure, though, that they won’t drive during a break from school – if they are uncovered and in an accident, you could risk losing a lot of money.
- Don’t buy a new car – Brand-new cars are much more expensive to insure than older models. If you intend to buy a car for your teen to drive, resist the urge to get something brand-new. Instead, purchase a reliable older car and save a significant amount of money when it comes to insurance.
- Don’t report fender benders – Although insurance companies aren’t a fan of this idea, consider paying for fender benders out of pocket, without reporting it. Even a single accident can raise your premiums, so it may be more cost-effective to you to not report it and instead, pay out-of-pocket.
- Choose a safe car – When you and your former spouse are choosing a car for your teen to drive, consider something safe – this will not only do the obvious, but will also save you money on car insurance. Sporty cars always cost more to insure, as do larger trucks and SUVs.
- Safety features are good – Along with choosing a conservative car, look at the safety features as well. Cars with airbags, anti-lock brakes, and automatic seat belts can help make a difference in your insurance premium.
- Car registration – Keep the car registered under the parent’s name that the insurance is under, instead of the teen. This is a commonly missed factor that can affect insurance rates.
- Drop collision or comprehensive coverage on old cars – If your teen plans to drive an older car, consider dropping the collision and comprehensive insurance. The reason is this: Paying a month premium to maintain these may be much more expensive than paying out-of-pocket in the rare event of an accident.
This is a post from Pam King, who writes about frugality, safety and insurance literacy for Direct General, a provider of car insurance quotes.