Auto insurance companies start to track your children as drivers as young as 14 years old

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You might see a section on your auto application that ask the question ” are there any drivers in your home 12 years of age or older. If so, please list them on the application.” Driving age vary from state to state. In some states, young teenagers can get their permit as early as 14 years of age.

Adding a 14 or 16-year-old to your policy can greatly increase your premium, possibly making it difficult to afford insurance. Many parents face this decision every day. Rodney d young insurance among some othes companies do not require you to add young drivers with permits to your insurance policy. However, once they get their driver’s license, the insurance company will want you to add them on the policy. If you do not add them on the policy and they have an accident, it is likely the insurance company will still cover the accident, but will probably charge you back premiums for the period of eligibility. Some parents can afford to add their children, and some cannot. For those who cannot, here are some possible suggestions.

  1. If you are divorced and you do not have custody, you do not have to add your child to your policy. Make sure that the address on their license is at the other parent’s house. Some companies still require you to add them on if they drive your car; some do not. If you have to switch to a company that doesn’t do it.
  2. If your child or children are in college full time and stay on campus, have them change their license to the address of the college campus. In Philadelphia this could be a savings of $1,000 to $4,000 a year! You can take this money and use it for tuition.

For example, say you have two cars and live in the West

Philadelphia area you have a 2017 Nissan Maxima and a 2015 Ford Expedition. Your 40-year-old wife drives the Maxima. And the 42-year-old husband drives the 2015 Ford Expedition. Unknown to many policyholders, some insurance companies will assign the youngest driver to the latest model car.

In this example let’s say an 18-year-old is assigned to the Nissan Maxima.The premium for both cars before the 18-year-old was added to the policy was $4200 a year (not unusual for Philadelphia before this seminar). After the 18-year-old was added on the policy, the rate went up to $7,400.00 a year. That is an increase of $3,400 a year. A semester of tuition! Is it not worth the trouble to have your son and daughter change their license address?

So, before you think about adding you child onto your policy, call your company for a quote. Remember once you add them on your policy the company will make you exclude them to take them off.

If your child goes to a school in the city or county with low auto insurance rates, it might be economical to invest in an inexpensive car and get insurance for them in that area. For example, in Schuylkill County, Pa., the rate would only be $991 a year. That is a savings of $2,509 a year, and because your child has their own policy you do not have to add them to your policy.

  1. If your child does not go to college and is over the age of 20 and have a job, still have them change their address to a friend or relative’s home who does not drive. They can still drive your vehicle providing they have no accidents. If an accident occurs, then you must add them to yours.
  2. Based on non-standard insurance in Philadelphia.

Policy if they are going to continue to drive. Just remember the correct answer to the insurance company is how many people are licensed at your household, not who lives at the house. Most companies will run an MRV (Motor Vehicle Report) and Clue for your address. They will pull up the names of everyone who is licensed at your address. That is what counts.

It is most difficult for young drivers in the inner-city areas to obtain affordable auto insurance. Look at this fictitious scenario below.

A group of about five parents get together. The total number of children between the age 18 and 22 are 7 children. The parent’s chip in together and buy a house on sheriff sale or foreclosure. The parents ask the children to change their license address to the newly acquired property and possibly live there. Since all seven children have a new residence address they can drive their parent’s vehicles and be covered, with their parent’s permission of course. Now, let’s go back and use the example of the parents in West Philadelphia. If five sets of families paying up to $3,000 a year, per child, using the house scenario, that would be $21,000 a year in insurance savings. In 3 years, that could be a savings of about $63,000.

  1. If children want to buy their own cars, they should be allowed to. However, they can save hundreds of dollars by putting the vehicle in the parent’s name, but the child has to be responsible and obedient. They should understand by putting the car in the name of their parents, the parents can add the vehicle to their auto insurance policy and the child can still drive their own car. Of course, the child should show responsibility in helping with the cost of insurance and keep a clean driving record.

Please caution your children if they have an accident or moving violation it will cause their insurance to increase and possibly alert the company of a youthful driver that needs to be added to the policy. Parents should also keep current copies of their children’s license to monitor their driving record. Any friendly independent agent or tag agency will check their record for your benefit.

This plan should work legally and benefit everyone providing you have a good understanding of how insurance coverage works. Parents should be allowed to grant their children with the privilege to drive without being penalized with costly insurance coverage.

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