Do I need to add my kids to my auto insurance policy?

Jun 9, 2021 | Car Insurance, General

I’m commonly asked when you have to add a young driver to your auto insurance policy. Parents are often hesitant to add their children as drivers on their car insurance policy because they know their rate will increase. Yes, it’s true that your rate will probably increase when you add a young driver but there are a number of things you can do to help offset that increase. We’ll discuss these cost saving measures throughout this article.

When should you add your children?

You should add your children as drivers on your auto insurance when they pass their road test and obtain their drivers license. You do not need to add them when they have their learners permit. We find that in most cases, this is at age seventeen, but it could be different depending on your child’s timeline.

How much will my rate increase?

The biggest premium increase usually occurs when you add the first young driver. If you add additional children later, the additional children usually have a much smaller premium impact. When you add the first young driver at the age of 17, it’s not uncommon for your premium to increase 75-100%. This is quite a shock for many parents who aren’t expecting this increase.

Ways to reduce the increase…

There are many ways to reduce the increase in your premium. You can choose to do some or all of these.

  • Have all the drivers complete a NYS approved Point and Insurance Reduction Program, commonly referred to as Defensive Driving. You may say that you don’t need to take the course because you’re a safe driver, but even safe drivers will benefit from the insurance discount. The average cost of the course is $25 and you’ll keep the discount for 3 years. It’s a great value. You can find approved courses on the DMV website at https://dmv.ny.gov/pirp/online.
  • If your young driver earns good grades in school, they can probably get a discount. Most insurance companies want to see a B average or better to qualify for the discount.
  • Have your young driver drive a car that doesn’t need collision coverage. As you can imagine, new drivers have the highest frequency of accidents and this means that the cost of the collision coverage is very high for them. Choosing a vehicle that has a lower value and that you feel comfortable foregoing the collision coverage for will make a big difference in the cost.
  • The rates are based on their age so delaying their road test until after their birthday will help. Age 17 is cheaper than 16 and age 18 is cheaper than 17 and so on.
  • See if your insurance company has telematics discounts. These are the discounts that are based on how the cars are actually driven and these discounts can be up to 30% or more! If your young driver is safer than average, you’ll see a great reduction in rate directly tied to their good driving.
  • If your young driver goes to college far from home and does not have a car with them, they might qualify for a discount.

When can I remove my kids from my car insurance?

You can usually remove your children from your auto insurance policy when one of two events happen. The first would be when they buy their own auto insurance. The second would be when they move out of your home and aren’t regularly driving your vehicles.

There are many other situations that could pop up such as your children entering the military, studying abroad, and many others so please contact us to discuss your specific situation and we’ll give you advice specific to your situation.

John Lofrumento, CFP®, FSCP®, RICP®
President, The Lofrumento Agency
Clifton Park, NY / Ballston Lake, NY

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