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What Kind of Insurance Coverage Should You Get for a Teen Driver?
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What Kind of Insurance Coverage Should You Get for a Teen Driver?

When considering what type of insurance coverage you should get your teen driver, ask yourself these questions:

  • Will your child’s health insurance coverage pay for any serious injuries?
  • Do you want coverage that pays for losses caused by hit-and-run drivers?
  • Do you trust your child’s abilities to drive defensively?
  • Can you pay for any property damage or injuries out of pocket?

It doesn’t matter how long your teen has been driving––the statistics speak for themselves. According to the Centers for Disease Control and Prevention (CDC), collisions are the second-leading cause of teen death.

You want to do everything in your power to protect your loved one in the event of a collision. Having inadequate insurance can open yourself up to liability and litigation.

What Can Insurance Coverage Do for You?

Car insurance isn’t just another monthly payment; it’s protection in the event that your child gets into an accident. Depending on the type of coverage you purchase, it could cover:

  • Lost wages, if your teen had to miss time from work due to the collision
  • Medical bills, if your teen required healthcare after getting hurt in an accident
  • Property damage costs, if your teen’s car is damaged or totaled in a crash

Insurance can also cover physical therapy, mental health counseling, and transportation costs. It all depends on the type of policy you buy. In general: the more expensive the monthly payment, the more it covers. However, be sure to read the fine print before signing anything. Pricier isn’t always better.

Types of insurance policies

According to the Insurance Information Institute (III), there are six basic types of insurance. These forms of coverage include:

 

  • Personal injury protection (PIP) coverage. Usually required in no-fault insurance states, this coverage pays for your injuries if you’re hurt in a crash, regardless of who is at fault.

 

  • Bodily injury liability. If you cause an accident, this coverage will pay for the other driver’s losses up to the liable policy’s limits.

 

  • Property damage liability. This insurance follows your car, not the teen driver. So, regardless of who’s in the driver seat, if they get into an accident, this policy covers the damage to the other vehicle or object.

 

  • Collision coverage. This usually comes with deductibles, meaning that you have to pay a certain amount out of pocket before you can get coverage. This policy kicks in when you get into a collision with a fixed object or another vehicle.

 

  • Uninsured/underinsured motorist coverage. If you get into an accident with an uninsured or underinsured driver, this coverage allows you to seek compensation. In some states, this form of coverage is automatically included as part of your insurance plan.

 

  • Comprehensive insurance. This covers damage to your car that is not caused by a collision. So, for instance, if you hit a pothole and break your axel, this policy could cover the cost of repairs or replacement. Comprehensive insurance also comes with deductibles.

Most States Require Auto Insurance

Before committing to a policy, be sure to research your state’s insurance regulations first. For instance, some states require you to carry no-fault insurance. This means that if you get into an accident, you would file a claim with your own policy––not the other driver’s.

The only two states that do not require auto insurance are Virginia and New Hampshire. In Virginia, you don’t have to carry insurance but instead, you have to pay $500 in lieu of having insurance. This means that if you get into an accident, and you do not have insurance­­–– you have to pay for your damages out of pocket.

You can click here to learn more about your state’s insurance requirements.

Also Read: What is a bridge loan?

Things to Keep in Mind When Shopping Around for Insurance

You might be tempted to get the cheapest insurance policy available. After all, maybe your teen driver drives to and from school. What are the odds of them getting into an accident?

Well, according to the latest information from the CDC, almost 260,000 teens were treated for accident-related injuries in 2019. Common causes of accidents included driver error, distracted driving, poor judgment, and––perhaps unsurprisingly––inexperience.

With that being said, here are some things to keep at the forefront of your mind when shopping for car insurance:

Some Insurance Companies Offer Incentive Programs

Many insurance companies, namely AllState and Geico, offer incentives when it comes to insuring teen driver. For instance, if your teen takes a driving course offered through the insurer, you could get discounted premiums. Another incentive through AllState notes that if your child is attending college more than 100 miles away, you could also get a discount.

When shopping around for a quote, be sure to share all information regarding your teenager’s driving status, including their age, school, job, and other details. Even the smallest details could aid you in the long run.

Some Cars Come with Low Insurance Rates

Many insurance companies will see that you want to insure a teenager and immediately offer you higher rates than normal. However, in the same vein, insurers will see what car your teen is driving and could offer you a discount.

In no particular order, these are some cars that may be eligible for lower premiums:

  • Mazda
  • Prius
  • Toyota
  • Ford Fusion
  • Honda Civic

The year of the car may also play a role in your teen’s monthly insurance rate. Additionally, contrary to popular belief, your car’s color does not necessarily impact your insurance rates.

Insurance Premiums Are Subject to Change

Your teen might have to pay more-expensive-than-normal premiums for a few years. However, once they reach 25 years old, they may see a decline in their monthly rate. These other things could also lower your teen’s premiums:

  • Their driving record
  • How often they drive
  • Their marital status
  • Their location
  • The type of car they drive

Insurance rates are not set in stone. If your teen practices safe driving and has a clean record, they could see a decrease in their payments over time.

Insurance Companies Are For-Profit Businesses

On TV, insurance companies market themselves as being your friend, always being on your side. However, oftentimes, this is not the case. When an insurance company gets a claim, it’s passed onto a claims adjuster. Their job is to pay as little money as possible for any repairs, medical bills, or associated damages.

What this means is that when shopping around for a new policy, be sure to check previous customers’ feedback and comments. If you see that a particular insurance company always denies claims or treats claimants unfairly, you should think twice about purchasing coverage through that entity.

You can check the Better Business Bureau’s website for more information about how certain insurance companies treat their clients.

The Takeaway

The best kind of insurance for a teen driver is one that protects their interests in the event of a crash. You want to be one-hundred percent prepared for anything they encounter on the road.

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