Are my kids covered under my car insurance?
When your children are ready to begin learning how to drive, your car insurance will cover them in most cases. That coverage will change however, when the child earns his or her driver’s license. At that point, the child will have to be added to your policy at an additional expense if he remains living in your household. This is true even if he goes off to college, as long as your address remains his permanent one.
As you read this article, keep in mind that car insurance companies are very heavily regulated by the various states. When your insurance company tells you your child must be added to your policy they are not simply trying to rip you off. Most of the time your state forces them to require your child to be added in order to make sure they are collecting enough premiums. Without sufficient premium collection, they may not have enough money to cover claims.
It’s also important to note that the ONLY person who can confirm whether or not your kids are covered is your car insurance company. Every policy is unique and no website can explain the details of your unique policy but just speak in general terms.
What about children with learner’s permits?
A child with a learner’s permit is considered both a casual driver and one under the supervision of his parents. Since a child on a learner’s permit cannot legally drive without a parent or other adult guardian in the car, it is relatively safe in terms of the risk you’re exposing your car insurance company to do. In most cases, you will not be required to add that child to your policy as long as he remains as a motor vehicle operator under a learners permit.
In many states you can continue with a learners permit indefinitely; although in most states it’s required to be renewed on a periodic basis. So if your child is in no rush to get his or her license at 16 or 17, he could remain on a learners permit until earning his license becomes an absolute necessity.
For example, if he were going away to college this might be the perfect scenario. He could get his learners permit at age 16 with the goal of practicing for two years before getting his license at 18. During those two years, he is not added to your policy and there’s no additional cost.
What happens when my child earns his/her drivers license?
Once your child earns his or her license you will be required to include that child on your insurance policy. Another option is for the child to get his own policy, but that may require him to purchase his own vehicle or have one registered in his name. Regardless, it’s going to cost you or your child a significant amount of money because he is still young. Just as an example, a young man between the ages of 18 and 25 will pay the highest rates around because of his age and sex.
If your child is going to continue to live at home or count your address as his permanent address while away at college, don’t try to get around adding him to your policy. If you fail to tell your insurance company that he’s earned his license they find out, they will most likely drop you at the time of your renewal as a result. When you shop around for new insurance, the fact that your son has his license will be discovered through a normal DMV search and you’ll pay for him anyway.
Furthermore, if you don’t inform your car insurance company and your child has an accident, you may have your coverage dropped. What’s more, the auto insurance company may decline to cover the damages of the accident. Lest you think they can’t do that, they can. Insurance laws in almost every state allow car insurance companies to deny payment if you violate the terms of your policy. One of those terms is informing them when your children earn their driver’s licenses.
What if I can’t afford pay for the increase?
Some parents find it difficult to pay the higher insurance premiums after adding a child to the policy. This reality makes it more common than it should be for parents to fail to notify their insurance companies. But as you can see from the previous paragraphs doing so is not a good idea. It is far better, for several different reasons, to find other ways to pay for the increased premiums. The first of those options is to require your child to get a job and pay the insurance himself.
You can pose to your child ahead of time the fact that earning his license is tied directly to his ability to pay for insurance. By making it a requirement for Junior to have a part-time job to prove he’s responsible enough to get his driver’s license, you are ensuring that he has money coming in to pay for his own insurance. When he finally does get his driver’s license he’ll already be in the habit of working and you probably have less of a struggle getting him to accept responsibility for his premiums.
When it does come time to add your child to your policy, ask your insurance company for a written breakdown of how much it costs each driver to be insured. You can give your child a copy of that breakdown and call it his insurance bill. This not only allows him to see what it’s actually costing, but it gets him accustomed to the idea of receiving bills and making sure they are paid on time. Car insurance is one of the best tools you can use to teach her children financial responsibility.
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