After years of talking and dreaming about it, your teen is ready to drive. Almost immediately, your head begins to fill with questions about whether your child is ready to drive and how it will affect you and your family. Then, the big questions come – this time regarding car insurance for teens and the financial responsibilities that come with letting your child behind the wheel. Continue reading to find the answers to some of the most commonly asked questions regarding car insurance for teenagers.
Who Is Responsible if Your Teen Causes an Accident?
No parent wants to think about it, but the question often lurks in the back of their minds. Could an underage driver be held liable for an accident? Would you be responsible as the parent? Would your insurance cover the damages? According to the Centers for Disease Control, the odds of that happening are pretty high. Nearly a quarter-million teenagers were treated for car accident injuries in hospital emergency rooms across the U.S. in 2013 alone. The likelihood of being in a crash as a whole is more than 3 times higher for 16 and 17-year-olds than for older drivers.
Though you should consult with your legal professional regarding liability, there is a good chance that you could be held financially responsible for your teen’s actions behind the wheel before age 18. If you carry state minimum limits, and an at-fault collision results in $50,000 worth of property damage and $75,000 in bodily injury liability, you would be on the hook for the amount that exceeds the limits on your liability protection.
Before your teen drives, review your insurance coverage to ensure your liability is enough to protect your assets if from an accident-related lawsuit. If higher liability limits are not sufficient, talk with your agent about supplementing your family coverage with an umbrella policy.
Does My Teenager Need Insurance for an Instructional Permit?
All new teen drivers under age 18 in Wisconsin must obtain an instructional permit and use it to drive a minimum of 30 hours of driving experience over a six-month period. While most parents understand that the eventual issuance of a driver’s license will mean adding the new driver to the family insurance policy, there is some confusion surrounding coverage during the learner’s permit phase.
Everyone – even unlicensed teen drivers with a permit – needs to be insured to operate a motor vehicle on Wisconsin public roads. Fortunately, most parent’s insurance coverage extends to cover the teen driver during this period. But don’t count on it, take the time to notify your agent before letting your teen take the wheel to be safe.
Does My Insurance Cover My Teen When at Work?
Do you know what happens if your teen is operating a vehicle under an unusual scenario? For example, assume your teen takes a summer job delivering food at a local restaurant. He is driving his personal vehicle to work, while at work, and home from work. Does your car insurance cover every leg of the trip? Though protections vary from insurer to insurer, the answer in most cases is, no. Most policies exclude coverage when your teen operates his vehicle for the transport of goods or people in exchange for payment. Talk with your agent here at Smith Insurance and Financial Services if your teen takes a job that requires driving or if you have a question about coverage in other special scenarios.
I’m a Good Driver. How Much Will My Premiums Increase with a New Teen Driver on the Policy?
It is almost certain that your premiums will go up once you add a teenager to your policy. Car insurance for teens is priced according to the amount of risk the insurer perceives in providing coverage. Since teens are more likely than any other group to be in an accident, they also tend to be the most expensive to insure.
Fortunately, there are some steps you can take to keep rates in check:
- Add your teen to an existing family policy to take advantage of existing safe driving and loyalty discounts
- Encourage your teen to maintain a B average or higher to qualify for potential ‘good student discounts.’
- Talk with an independent agency like Smith Insurance and Financial Services about whether a competing company might provide better rates on the coverage you need