Help! My Child is Getting Their License

The day has finally come where your child is getting their learner’s permit, which is the first stop on your child’s journey to getting their license. You can now look forward to driving around in empty parking lots, lecturing them on the importance of driving the speed limit, and putting on your blinker 100 yards before a turn. While they could not be more thrilled by this new sense of freedom, you could not be more frightened by the idea that they will soon be outside the scope of your watchful eye.

There is some good news, though. You will not have to add your child to your policy while they still have their permit. The learner’s permit itself has its own set of restrictions that come along with it. The most important being, that in order to operate a vehicle with a learner’s permit you must be under the supervision of a licensed driver over the age of 21 and who has been licensed for at least one full year. The teen driver will be covered until they obtain a full license.

At the point where your teenager receives their license you must notify your insurance company because they will not automatically add them to your policy. As a policy holder you are obligated to list every licensed household member on your policy unless you have both signed an operator exclusion form.

Now that they have your license the next step is to decide whether or not you would like your child added to your own policy or if you would like them to take out a policy in their own name. There are advantages and disadvantages to the options available to you. Below is a visual aid to help you understand the pros and cons of each choice.

Advantages

Disadvantages

Both the parent and child may be eligible for additional discounts as a result of adding them onto the existing policy. The child may be eligible for a multi car discount which they otherwise would not be able to obtain by themselves. The parent may be eligible for a good student discount (if their child has a GPA of 3.0 or better, a letter grade of B or better, or is in college and has made the Dean’s list.) If your child gets into an accident or receives a ticket your policy will be affected by any surcharges that may letter result from those incidents. Also if the child is in a severe accident or has had frequent accidents, this may result in the cancellation or nonrenewal or the parent’s auto policy.
Teen drivers can receive higher liability rates because the same coverage their parents are already receiving will now be continued on to them. The parent’s as holders of the auto policy become responsible for any negligence of the child meaning that their assets can become potentially exposed as a result of their child’s actions.
The parents will have control over the paying of premiums and will receive all communication between the insurance company and the insured driver. They will be able to monitor payments being made on time and that communication is answered and acted upon. They are missing out on the opportunity to exercise responsibility and gain real life experience. They miss out on learning to pay monthly bills and maintain their own policy.
   

As any parent already knows, you know your child better than anyone else. Consider your options with your own child in mind and decide which option will work best for your family.