Michigan law - My 16 year old daughter has her permit and will soon take her driver’s test and get the license. Up to that point I know I don’t need to make any insurance changes.
Shortly thereafter, we expect to get a third vehicle. What strategy, if any, can I employ to keep the insurance cost down. Can one vehicle be designated as the only car she will drive and different/cheaper coverage be put on that one?
Might it make sense to insure one or more vehicles in the name of my business? I understand that generally that cost is greater than personal coverage.
Looking for any/all suggestions (other than lock her in her room). TIA!
I suggest having her get her own insurance for 2 reasons:
1 - If she is on your insurance and she gets into a accident and suits excede the limits they will come after you for the rest (as opposed to just her, and I’m guessing her assets are lower then yours.
2 - When she does go to get her own insurance one day, she might be hit with a ‘new drivers rate’ which is higher then the rate someone would have with a history of having car insurance.
See if your insurer offers discounts for safe driver courses and also for good grades. If you can get by without the third car for a while, having her be listed as an “occasional driver” should help keep costs down, but you have to convince your agent that she is not the primary operator of that (or any) vehicle. Threaten, cajole, bribe, do whatever it takes to keep her from getting a ticket or causing an accident. Keeping her record clean is the best way to avoid having insane premiums. See how much difference a higher deductible will make in your costs. If the car is cheap enough, consider not getting collision on that car. If you get her a car, get her the opposite of what kind of car a typical teen would want. Instead of that red Miata, a Volvo station wagon would work, for instance. Let her be part of the process, so she’ll see how expensive it is, and how important it is to not have that increase any more.
Most of all, once you have all of the above in place, shop around.
First off she can’t get her own insurance as she is only 16, you would still have to sign for her.
The best tactic to keep down the cost of insurance is to have her rated as the primary driver on a liability only car. This will be more than an adult but you wont have the huge sticker shock of placing her as the primary on a full coverage car.
In my state most policies permit anyone who is not specifically excluded to drive any car as long as they have your permission.
So you can rate her on a beater but if she drives the Mercedes to the prom and has a wreck she would be covered.
This information is specific to one state that does not have no fault coverage. Check with a local agent to make sure of your options.
When I got my license at 16 in Michigan (yeah, full-fledged, non-restricted back then) my folk’s insurance went up just because I was their dependant, even if I wasn’t rated on any car. Things improved when I got a hand-me-down Escort with its own policy just for me. All this time and responsibility and point-free driving later, and I’ve still never paid less than I have on that first policy!
As soon as my stepdaughter turned 15, our insurance rates were automatically increased for the sole reason that she was old enough to drive. There’s a reason that car insurance companies ask the ages and birthdates of all members of the household.
We were basically forced to list her as a driver. My husband’s truck is insured and, for all intents and purposes, owned by his company, so we dodged the bullet on having to insure his daughter on three vehicles.
We ended up insuring her as the primary driver on my car as I have only liability insurance on it. She is insured as an occasional driver on my husband’s car, which carries comprehensive.
But as long as she lives in this house, and until she is either 18 or 21, she has to be listed on the insurance. If we get her a car, we have to add that car to our policies.
I agree with this post. I’m going thru the same thing (young driver about to turn 16). The costs are weird for this. For a brief period (hardship license*) we had more drivers than cars. This caused our rates to go up substantially because we could no longer use a multi-car discount (I don’t get it either :rolleyes: ). After our youngster’s hardship license expired, num of cars = num of drivers again, and rates went back down. Currently, we have just acquired a nice little subcompact for the missus to drive to work (Toyota Camry), and we’re listing the teenager as the primary on our old beater minivan. This seems to give us the best rates (multi-car, since cars=drivers, and high-risk driver in cheapest, liability-only car). As I understand it, the teen can drive any vehicle in a pinch, but must primarily use the old beater.
We briefly considered putting the teen in my big truck (trying to match commute distances with mpg ratings… only 1 mile to hi-school), but dropped that idea due to the hefty insurance bill if he was primary driver of the truck. Apparently the insurance companies are a little leery of new drivers being turned loose in 7000 lb., 300hp vehicles. Shame tho’, it woulda saved us a lot of fuel every month.
*Wife had leg surgery… unable to drive. 15 yr old had to drive her to work for awhile, then get himself to school. TX allows underage drivers to drive certain pre-approved routes (home-school-work) in these cases. They’re limited to only family members in the vehicle, and certain tightly-defined times when they’re legal to be on the road. We took advantage of this.
Brief note to the Original Poster in this thread. In questions like this, it might allow more detailed answers if you include your state in the “location” box.
I’m willing to bet money that you just gave bad legal advice.
If the insurance limits on the young lady’s policy were breached, I’ll bet $20 the injured party will pursue not only the young lady, but her folks and their assets as well, at least if she injured another party prior to her 18th birthday.
It’s best to title the vehicle in the child’s name once she turns 18 if you’re trying to avoid the associated liability. It’s also a good idea to carry enough insurance that it DOESN’T get breached. It would suck to be a 19-year-old young lady with an unsatisfied $200,000 judgement hanging over your head, and getting garnished against your wages for the next 40 years or until it was paid off.
Of course these things vary state to state in the US, but here in Louisiana (and Mississippi), only the number of licenced drivers count. I would be very very surprised if there was a law in any state requiring every person old enough to drive to have auto insurance. Might be company policy and therefor I agree that it is time to go shopping for another insurance company, or at least another agent.
Every single insurance company operates in the same way. There is no escape. It’s the way it works, at least in my state.
We have such a rampant infestation of uninsured drivers along with a high rate of alcohol-related accidents, I guess The Powers That Be decided that over-charging the responsible, law-abiding drivers would bring balance to the problem.
I’m not so concerned about my stepdaughter’s rates, though. I have much bigger problems on the horizon: two boys. Quel nightmare!