A Guide to First-Time Auto Insurance for Your Teenager
By: Vanessa McGrady
First, gather your wits. Yes, that sweet baby who, seemingly five minutes ago, was gurgling with a sippy cup and considering the merits of avocado (to wear or to eat?) is now preparing to get into a vehicle—and drive.
Once you've decided your teen is ready to hit the road, you have to make another decision about first-time auto insurance. It's different than buying auto insurance for an adult and you might be surprised by the jump in premium prices—sometimes an added 50 to 100 percent of the cost. That's because teens carry more risk.
According to the Centers for Disease Control, the demographic most likely to get in a car crash is a teen 16-19 years old—and they're three times as likely as those 20 or older to be involved in a fatal accident. Other factors that increase crash risk are additional teen passengers; inexperience; driving at night; driving while distracted (with a phone, fiddling with music, or by something inside or outside the car); and being impaired or sleepy. It's scary, yes, but it's so important to be aware of how vulnerable new drivers are and to do everything you can to mitigate the chances of an accident.
While You're Shopping
There's a lot to consider as you begin the search for insurance to cover your teen driver,who will most likely end up on your insurance policy. Before you talk to your agent about adding your teen, it's good to reacquaint yourself with the components of auto insurance and what you should consider with a new driver in the mix:
- Liability: This covers property if your teen causes damage or injury to another party—but not coverage for their own car, property or injury.
- Collision: If your teen is involved in an accident, this pays for all or part of what it takes to repair or replace the vehicle. It also covers damage caused by hitting a structure, such as a curb or a pole.
- Comprehensive: If your (or your child's) car is stolen or damaged—think natural disaster, fire or freak event such as a hailstorm—this is the coverage you'll want.
- Medical Payments: If your teen is in an accident and they and/or a passenger is injured, here's where protection for medical bills comes in.
- Personal Injury Protection: A teen injured in a car accident may need coverage for lost income or other expenses aside from medical bills.
- Roadside assistance: Does your teen know what to do if the unexpected happens? If they need help with a flat tire, tow, lockout or an empty gas tank, this coverage offers help—and peace of mind for you.
- Uninsured/Underinsured Motorist: What if your kid's car was hit by someone without insurance, or not enough coverage—who would pay for the damage? This insurance fills the gap.
- Umbrella Insurance: This is for those catastrophic injury, damage, lawsuit and settlement bills that are way beyond what your regular insurance pays out, so that you can ensure your assets are protected if your teen is found liable.
- Usage Based Insurance: Prices insurance based on how you drive. You can also monitor the driving behavior of your teen to provide coaching. For example, if your teens use their phone while behind the wheel, constantly exceed the speed limit, or swerve when they drive.
How to Navigate Your Conversation With Your Insurance Provider
When you discuss coverage with your agent, you'll want to have a good idea of the value of the car your teen will be driving, as well as any assets you have that could be at risk in a lawsuit. You'll also want to introduce anything that can possibly help reduce the premiums, such as your student's excellent grade average, as well as monitoring devices that can keep tabs on how your teen is driving.
Westfield, for example, offers student-driving discounts based on good grades or completion of a defensive driving course. You can also ask about usage-based insurance (also known as UBI), which provides discounts for safe drivers, and enables parents to monitor and coach their teen's driving behavior. Teens are more likely to engage with their driving education when they're rewarded, and UBI programs provide gift cards as a motivation for safe driving.
Your agent can't take away all your fear about having a kid out on the road—but they can at least make sure they're covered in case something goes wrong.
Connect with a Westfield agent to learn more.
Vanessa McGrady is an award-winning journalist, social media strategist and communications professional. But wait, there’s more! She’s also been a playwright, actor, producer and voice-over artist. She can sing “Home on the Range” in Yiddish, which is apropos of nothing.
She is the author of Rock Needs River, a memoir.