Teenager’s Guide to Auto Insurance

Why do I need auto insurance?

Car insurance protects you if anything happens to you, your car, someone else or someone else’s car because of you. There are many different policies you can choose from, depending on what sort of coverage you want…

  • Liability coverage pays claims if you are responsible for hurting another person or for damaging another person’s property.
  • Uninsured motorists coverage comes in two parts, which must be purchased separately. If you are hit by someone who does not have insurance, Bodily Injury coverage pays for your injuries, while Property Damage coverage pays for damage done to your car.
  • Collision coverage pays if your own car is damaged in a collision.
  • Comprehensive coverage pays for damage to your car, such as theft, vandalism, glass breakage, etc.
  • Medical expense coverage pays medical and funeral expenses for you and your passengers.

What  if  I  don’t  have  insurance?

Auto insurance is required by law. If an officer stops you and you don’t have insurance, he can tow or impound your car. Not having insurance can also get you in trouble if you are in an accident, even if you are not at fault. According to state law, the other driver in an accident is not required to pay you the first $15,000 of damages resulting in bodily injury or the first $25,000 of property damages if you do not have insurance.

When I get my license, will my parents’ insurance cover me?

When you get your license, your parents can add your name to their policy as an occasional driver because you’re driving their car. When you get a car of your own, you must be listed as the primary driver of that car.

 How does my insurance company decide how much my policy will cost?

The cost, or premium, for your insurance is based on:

  • your driving record
  • the make, model and age of your car
  • your age
  • your sex
  • where you live
    • whether you are the primary or secondary driver of the car
    • how far you drive to and from school or work

     

Why do teen policies cost so much?

  • Teenage drivers have high rates of both fatal and nonfatal crashes compared to older drivers, and they are more likely to be at fault in their crashes.
  • Teenagers generally are less likely than adults to use safety belts, adding to the risk of fatal injuries.
  • Crashes are the leading cause of death among teens, accounting for more than one third of all deaths of 16-18 year-olds.
  • Sixteen to nineteen-year-old drivers are more likely to speed, run red lights, make illegal turns, ride with intoxicated drivers and drive while under the influence than any other age group.
  • Distractions caused by cell phone use, loud music and too many passengers are also factors in the high rate of crashes among teens.

How often do I have to pay my premium?

With most companies, you have the option of paying your premium every one, six, or 12 months. At the end of this time period, it is up to your insurance company to decide whether your policy will be continued. Check with your agent to see if you qualify.

 

What  if  I  don’t  pay  my  premium?

If you don’t pay your insurance premium, the company will cancel your policy. This may make it harder and more expensive to get a policy from another company.

Some companies may give you the option of paying your premiums in installments, but keep in mind that this works like a credit card. You will be required to pay interest.

My Dad taught me to drive, and I’m a pretty good driver. Why do I still need to take Driver’s Ed?

According to state law, you must take driver’s ed before you can get your license, if you are under 18. Driver’s ed is not required after your 18th birthday. You
may still want to enroll, though, because many insurance companies offer lower costs for drivers who complete  the  course.