Car Insurance? My kid is getting her own car

In My Humble Opinion
1

My daughter is getting her own car in a couple days. I am wondering is it best to add her car to my insurance policy or have her get her own policy, perhaps even at a different company?

She has been on my policy for over a year and covered on my car.

The car will be in her name but she is still a minor. Can she even get her own policy as a minor?

Right now I have the state minimum coverage as adding a teenage to my policy made it go sky high and I could not afford the higher rates and my credit sucks as well.

I guess I am looking for other parents that have had their children get their own car and how they handled the insurance and how it worked out.

2

Adding a new car cost us another $60/month. When she got her license, adding her cost us another $60/month on top of that. She’s on our policy.

It’s not the cheapest insurance but this company doesn’t cancel the entire family if our daughter gets in one wreck, as others do.

3

I have never heard of anything other than simply adding a minor child to the family’s existing policy. That has to be the cheapest way and I don’t know if she could get her own policy either. I don’t see any benefit in that.

4

When Hallgirl1 got her own car, it was added to our policy. She was responsible for paying for the car insurance.

That became a Hall Household Rule–You don’t drive until you can pay the insurance and all related costs of driving (gas, etc.)

My insurance company at the time (Progressive) broke it down for me as to what portion was “hers” and what portion was mine. Hallgirl1 paid for hers, and when Hallgirl2 began driving we did it again. Even though Hallgirl1’s car was in her name, we shared the policy. Matter of fact, my insurance company required it, since she was living in the household.

5

Even if you could find a company that would give your minor child their own policy it would be much more expensive that way. If she is on your policy she can benefit from a multi-car discount, good driver discounts you may be receiving, etc. On her own policy she won’t be eligible for any of that.

I am an insurance agent, but not YOUR insurance agent. I advise calling you agent to ask about the options available through your company.

6

Michigan here. Our agent pointed out that the greatest benefit of keeping the eldest daughter on our policy was that she got the benefits of the discounts that applied to me - primarily a multi-car discount & the discount for us having our homeowners there too.

7

I’m not an insurance agent, but I have worked in the insurance field for (Ogg help me) 22 years now.

It’s almost certainly going to be cheaper to add your daugher’s car to your policy.

Also, bear in mind that an insurance policy is in fact considered a contract under the law. As a minor, I believe your daughter is not allowed to enter into legally binding contracts, so even obtaining a separate policy for her may not be possible.

8

[QUOTE=PunditLisa]
Adding a new car cost us another $60/month. When she got her license, adding her cost us another $60/month on top of that. She’s on our policy.

It’s not the cheapest insurance but this company doesn’t cancel the entire family if our daughter gets in one wreck, as others do.
[/QUOTE]

Well I just removed a car we used to have and was going add hers on my policy so I am not really expecting to pay more money than we pay now. The old car and her new car are pretty comparable as far as I think coverage goes. At least I hope it is about the same.

[QUOTE=Shagnasty]
I have never heard of anything other than simply adding a minor child to the family’s existing policy. That has to be the cheapest way and I don’t know if she could get her own policy either. I don’t see any benefit in that.
[/QUOTE]

I had not either but I do remember hearing a couple years ago that for first time car owners that it is not always cheaper to be added to your parents policy. I don’t remember what company it was though. That is why I asked I figured someone might come along with more insight.

[QUOTE=phall0106]
When Hallgirl1 got her own car, it was added to our policy. She was responsible for paying for the car insurance.

That became a Hall Household Rule–You don’t drive until you can pay the insurance and all related costs of driving (gas, etc.)

My insurance company at the time (Progressive) broke it down for me as to what portion was “hers” and what portion was mine. Hallgirl1 paid for hers, and when Hallgirl2 began driving we did it again. Even though Hallgirl1’s car was in her name, we shared the policy. Matter of fact, my insurance company required it, since she was living in the household.
[/QUOTE]

She already pays for part of the insurance. We had two cars and there are three of us so she paid a third of the insurance bill every month. She also had to put gas in it. Most of the time she did it on her own. She does not want to run out of gas any more than the rest of us would…lol

[QUOTE=pbbth]
Even if you could find a company that would give your minor child their own policy it would be much more expensive that way. If she is on your policy she can benefit from a multi-car discount, good driver discounts you may be receiving, etc. On her own policy she won’t be eligible for any of that.

I am an insurance agent, but not YOUR insurance agent. I advise calling you agent to ask about the options available through your company.
[/QUOTE]

And I knew someone would come along with more insight.

That is what I was planning on doing but I thought I would ask. I know there are people out their that know a lot more than I do.

Thanks for your replies

9

Ii have one more thing to suggest. If your daughter has her own car, you may be able to have her “excluded” from your car. That means she can drive her car only, NEVER yours. Not even down to the corner for milk. This may make your insurance less expensive.

10

[QUOTE=Cheez_Whia]
Ii have one more thing to suggest. If your daughter has her own car, you may be able to have her “excluded” from your car. That means she can drive her car only, NEVER yours. Not even down to the corner for milk. This may make your insurance less expensive.
[/QUOTE]

It may not be a good idea to do this unless the savings are significant. There are good reasons why the OP’s daughter may need to drive the other car, and excluding her from being able to drive that car may end up costing more in the long run if there is an accident, whether it’s the daughter’s fault or not.

Robin

11

My wife’s deal with her daughter was that she paid her daughter’s insurance on mom’s policy until her daughter reached a certain age (I forget what) or had her first accident.

The accident came first when the daughter ran over a pedestrian within weeks of getting her license.

Pedestrian lived, insurance paid to the $100k limit and daughter had to get her own insurance.

12

[QUOTE=Belrix]
My wife’s deal with her daughter was that she paid her daughter’s insurance on mom’s policy until her daughter reached a certain age (I forget what) or had her first accident.

The accident came first when the daughter ran over a pedestrian within weeks of getting her license.

Pedestrian lived, insurance paid to the $100k limit and daughter had to get her own insurance.
[/QUOTE]

OMG that is awful. I can’t even imagine my daughter hitting someone.

So far she is a pretty good driver. She had one small scuff in a parking lot. She took her grandmother to the store. While she was waiting she realized she was not really straight in the space so she went to back out and pull back in. She was in my Jeep Cherokee so she was up high and did not see a small car that was directly behind her pulling out of a spot on the other side. It was a small scuff and only caused $350 damage. Not a lot but it scared her and worried her enough that she takes the extra time to look better before backing up.

At least she now knows what to do in case of an accident. I told her what to do and her driving school went over it was well but until it happens you really are not quite sure not even counting in the scare factor. I was glad my mom was there to help and walk her through it. The lady drivng the other car was in small hysterics and she even called the police which of course could do nothing as it was private property and everyone had a legal license and insurance.

I did think about excluding her from my Jeep as that is the more expensive one to cover at about three quarters of the insurance bill but I really want her to be able to drive both. There have been several times that it was in last in the driveway and it was easier for her to jump in and run to the store or the library.

13

[QUOTE=Belrix]
My wife’s deal with her daughter was that she paid her daughter’s insurance on mom’s policy until her daughter reached a certain age (I forget what) or had her first accident.

The accident came first when the daughter ran over a pedestrian within weeks of getting her license.

Pedestrian lived, insurance paid to the $100k limit and daughter had to get her own insurance.
[/QUOTE]

In the OP you said

I don’t know the sate minimums in your state, but here in California they are 15,000/30,000 for bodily injury and 5,000 property damage. With the cost of medical care and car repair these days, this is woefully inadequate.
Look at the bodily injury award that Belrix cited. If you have 15/30 coverage you would need to cough up the $85,000 dollar balance. If your teenager hit a new car an totals it, what new car can be bought for $5,000? Not many is the answer.
You should seriously consider increasing your coverage to something realistic. It doesn’t cost as much as you might think.

14

[QUOTE=SomeUserName]
Right now I have the state minimum coverage as adding a teenage to my policy made it go sky high and I could not afford the higher rates and my credit sucks as well.
[/QUOTE]

This sounds very dodgy. Are you sure you can’t say, “I’m very sorry, honey, but we can’t afford to insure you”?

15

[QUOTE=Quartz]
This sounds very dodgy. ?
[/QUOTE]

I am not sure what you mean by dodgy.

I had another insurance company for a long time. I had great coverage and my rate was low. My truck was stolen and I claimed it. They paid the claim and it was shortly after that my daughter got her license and I had to actually put her on the policy. They wanted to triple my rates. There was no way I could afford it. I assume because of the claim, which came out to only $700.00, and because my daughter was a new driver. It really pissed me off since that was the only claim I ever made in the at least eight years I was with that company.

We used the $700 from the claim to buy a crappy 1988 Tracer and they wanted over 2 grand a year to cover it and it was not much over what the state minimum was.

I got quotes from at least a half dozen insurance companies if not more. Most of them well known and I since I had steady insurance for many years I thought that would make a difference but they still were very expensive.

I assume since she was a new driver and my credit score is horrible that was the reason for such high rates. Maybe my recent claim also raised a flag.

a) Recent claim
b) Brand new driver
c) Crappy Credit

All equal $$$$$

I have had this minumum coverage for just over a year. I got some quotes again right before it was time to renew my policy. I thought maybe I could get a better rate since she had been driving for over a year but they are still sky high.

I did check for just me on the coverage and of course it was much much lower. I would love to be able to afford more coverage and have her on the policy but I can’t afford both.

At this point I am with out $300 a month that I used to have so I do the best I can. Sometimes cutting corners is what must be done. At least we have insurance. There is a great many out there that have none so at least we are doing what is required by law.

That is one reason I created the OP. If I thought she could go and get her own policy and perhaps better coverage then I would encourge her to do so. Other than the third of the insurance and her cell phone bill she has no other bills so maybe she could afford it but it does not sound that way from posters responses.

She is not going to be 18 until October so at this point things are going to have to stay they way they are.

16

FWIW, most insurance companies don’t use the FICO score. There is a separate database they use for that. Most likely, the biggest hits are the claim and the fact that your daughter is a new driver.

The ways to save on insurance are:

  1. Increasing the deductible. Don’t set it so high that you can’t afford to pay it, but it shouldn’t be so low that you can’t afford to pay the insurance, either.

  2. Decreasing coverage. If you’re already at state minimums, you’ve already done that.

  3. Getting whatever discounts you can get your hands on. Some companies have relatively generous discounts; others, not so much. The company I represent, for example, offers discounts for members of certain groups that have agreed to sign up for them. Your daughter may be able to qualify for a good-student discount, and if you have your homeowner’s or renter’s policy through the same company, you may be able to qualify for a multiple policy discount. Talk to your agent to find out which of these, if any, you qualify for. You may not get them unless you ask. Switching carriers every year or two won’t help, either. You may save money now, but you may miss out on longevity discounts.

Just out of curiosity, how did you get these quotes? Did you get them directly from an agent, or did you get them online? My suggestion is to talk to an agent, if you haven’t, but do this after she’s turned 18 and has a regular license.

In the interest of full disclosure, I am an insurance agent, and I am licensed in property and casualty. I may not be licensed in your state, however, so some of what I’m telling you may not be available.

Robin

17

[QUOTE=phall0106]
When Hallgirl1 got her own car, it was added to our policy. She was responsible for paying for the car insurance.

That became a Hall Household Rule–You don’t drive until you can pay the insurance and all related costs of driving (gas, etc.)

My insurance company at the time (Progressive) broke it down for me as to what portion was “hers” and what portion was mine. Hallgirl1 paid for hers, and when Hallgirl2 began driving we did it again. Even though Hallgirl1’s car was in her name, we shared the policy. Matter of fact, my insurance company required it, since she was living in the household.
[/QUOTE]

I still live at home (at 22) and I requested my own policy a few years ago so that I could build up my own account history but they still list me under the “umbrella policy”. My statements is under my name only but my name is still listed on my parents statements. As long as I live at home I can’t NOT be listed on their policy.

18

[QUOTE=MsRobyn]
FWIW, most insurance companies don’t use the FICO score. There is a separate database they use for that. Most likely, the biggest hits are the claim and the fact that your daughter is a new driver.

The ways to save on insurance are:

  1. Increasing the deductible. Don’t set it so high that you can’t afford to pay it, but it shouldn’t be so low that you can’t afford to pay the insurance, either.

  2. Decreasing coverage. If you’re already at state minimums, you’ve already done that.

  3. Getting whatever discounts you can get your hands on. Some companies have relatively generous discounts; others, not so much. The company I represent, for example, offers discounts for members of certain groups that have agreed to sign up for them. Your daughter may be able to qualify for a good-student discount, and if you have your homeowner’s or renter’s policy through the same company, you may be able to qualify for a multiple policy discount. Talk to your agent to find out which of these, if any, you qualify for. You may not get them unless you ask. Switching carriers every year or two won’t help, either. You may save money now, but you may miss out on longevity discounts.

Just out of curiosity, how did you get these quotes? Did you get them directly from an agent, or did you get them online? My suggestion is to talk to an agent, if you haven’t, but do this after she’s turned 18 and has a regular license.

In the interest of full disclosure, I am an insurance agent, and I am licensed in property and casualty. I may not be licensed in your state, however, so some of what I’m telling you may not be available.

Robin
[/QUOTE]

All the quotes were online and one over the phone except the most recent.

They had agents from Liberty Insurance come to our company about a month ago. They were offering group rate insurance at a 10% discount and they also offered payroll deductions. It sounded good so I filled out all the paper work. Other than telling me I should raise my coverage he said that he could not give me anything close to the rate I am paying now which is about a $1000 a year. I was pretty bummed about it.

The weird part was before I talked to them I went on their website and got an online quote from their company. The coverage I set was exactly the coverage I have now and it was $20 more a month. I thought well okay but if I add on the 10% discount and the benefit of payroll deduction it would come out to about the same as I pay now. I only did it so I had an idea of what sort of rate they may offer. He never offered it. He gave me no quote at all except for renters insurance that I never asked about.

My daughter is home schooled so other than telling them she is a good student I have no “report card” per se to show them. I think the only discount I have now is multi-car but I would have to look for sure. They did recently mention when I renewed that if I could prove I had coverage six months prior to me changing insurance I could get another discount but I no longer have any of that paperwork and have no idea how to get that proof. The only thing I have is my old policy number. They talked about a letter of experiance but I went to my old insurance website and I saw nothing on how to get one.

I thought they used the credit score as every single site I went to made you check a box that says they are using your credit score to determine rates and you must check the box to allow them to do that. Even the paperwork I filled out for Liberty had a disclaimer about a credit check.

It has gotten depressing looking for better rates. It seems I have found the lowest there is right now. It is even more depressing that I had such good coverage for what I felt was with a good company for such a long time. I mean I knew my rates would go up putting my daughter on but three times the amount was pretty upsetting.

19

Call your agent or your previous insurance company. They have all of your past paperwork in the computer system and will gladly fax a copy of your declaration page so that you can get the extra discount.

You may also want to check and see which car your daughter is rated on with your policy. If she only ever drives an old beater and your nicer, newer car is almost never touched by her make sure they know that so she isn’t being rated on the most expensive car.

20

If your daugher is living with you at home and if the car she uses is registered in your name, you can still get car insurance for her under your policy. It will make your car insurance much higher but then it still works out to be much cheaper than she getting her own car insurance. You can check out www.CarInsuranceQuotes.com. They provide you free car insurance quotesfrom reliable car insurance companies. You could probably get a good deal for yourself and your daughter. They offer a discount too.