Each year, thousands of young people across the state obtain a learners’ permit and begin their driving career. If you have new drivers in your household, should you add them to your auto insurance policy? If so, what will it cost and what happens if they get into an accident or commit infractions? When is it time to take them off your policy? We break it down for you here.
When Do New Drivers Need Insurance
With Michigan’s graduated licensing system, there are many restrictions on young drivers before they graduate to a full license, including always driving with a licensed driver. Therefore, while your child is learning and practicing, they are covered under your policy. Once they have graduated to driving unaccompanied, adding them to your auto insurance policy as an occasional driver is the most cost-effective way to go. Add them to all of the vehicles on your policy. Doing so will make it easier to stay in compliance when vehicles need to be shuffled or parked.
What is the Cost of Adding an Occasional Driver?
Adding a child to your policy, even as an occasional driver, will likely increase your premiums. And you can expect your premiums to increase even more if they happen to be involved in an accident or commit an infraction such as speeding or running a red light. However, the increase will be a small fraction of the cost of ensuring the new driver on their own policy. Check with your insurance provider. They may offer discounts for completing a driving course, for academic performance, and for exhibiting good driving habits.
Young Drivers Are Most At Risk
Statistics show that drivers aged 16-17 are at a greater risk of being involved in an accident than any other age group. Therefore insurance rates for these drivers can be several times higher than rates for older drivers who can demonstrate a clean driving record. In Michigan, where auto insurance rates are high compared to the rest of the country, the premiums for a new driver on their own policy are prohibitive. Establishing good driving habits while your child is covered by your policy will help maintain a clean record when it’s time to purchase their own insurance policy.
When to Go Solo
There is no rule that you have to remove a teen or adult child from your auto insurance policy at a particular age. However, once they move out and no longer live in your household, it probably makes sense to remove them. Since it isn’t possible to purchase insurance for a car you don’t own, your child will be required to purchase their own insurance once they become the sole owner of a car, whether they live with you or not.
Adding your child to your insurance policy is the best way to insure your new driver at a reasonable rate while they gain experience. Then it’s up to them to drive responsibly to avoid having to pay for accidents and infractions when they pay their own way. GIve us a call to learn more about adding children to your car insurance policy. We can help you find a policy or package that provides the most protection for everyone in your household without costing a small fortune.
