The day has come…your teenager gets his or her license…how exciting! Then the panic sets in and the questions swirl through your mind.
Do I have to add my child as an operator on my auto insurance policy?
Yes, you do have to add the newly licensed driver. You are required to list all licensed operators in your household as operators. If your child only operates your vehicles occasionally, then the highest rated vehicle on your policy will be charged an occasional operator rate. If she/he is the principal operator of one of your vehicles, then that vehicle only will be rated with the inexperienced principal operator rate. If your child ends up getting his/her own vehicle, then most Massachusetts insurance companies will allow you to list the child as a deferred operator so you no longer have to pay an inexperienced rate on your policy. Beware, however, that there are now companies writing in Mass. that no longer allow deferrals. So you may be paying for the inexperienced operator on your policy and on their policy.
How much is this going to cost me?
The inexperienced operator rate can be substantial. You can’t avoid this BUT there are cost savings measures you may be able to take advantage of to keep those costs down:
- Consider increasing your collision deductible. Collision is the one coverage that you have some control over the cost based upon the deductible you select. Increasing the deductible from the standard $500 to $1,000 will usually result in a worthwhile savings.
- Be sure you are taking advantage of the Good Student Credit offered by many companies if your child is eligible, i.e. has a B or better average during his/her last term. All you need to do to get this credit is provide your insurer with a copy of the latest report card or transcript.
- Let your account manager know if your child attends school over 100 miles away as most companies offer a credit for this situation, provided the child does not have one of your vehicles at school.
- As stated above, if you child obtains his/her own vehicle be sure you are insured with a company that will allow you to defer the child on your policy. Deferrals are applicable to Massachusetts auto insurance only.
Do I have enough protection?
Statistically, having an inexperienced operator drive your car increases the likelihood that car will be involved in an accident. You hope your teenager will defy those odds and never have an accident but if they do you, as the owner of the vehicle, will be financially responsible for the damage he/she causes. It is definitely the time to review your liability limits to see if they are sufficient to protect your family’s assets against a severe loss. If not, increase those limits to a level you feel most comfortable with. Then, if you want even more protection, consider a Personal Umbrella policy which will give you excess liability coverage of at least $1,000,000 (higher limits are also available) for a very reasonable premium.
Contact your account manager as soon as your teenager gets that license and she will be happy to go over all of your concerns and help ease that initial panic.