Car insurance for your kids
As a parent, you are probably aware that insurance companies will charge a much higher premium for your child that has recently acquired a drivers’ license. In fact you should be aware of this, considering that you or your parents had to pay a higher rate when you were that age. The reason for this is because insurance companies know that most accidents, in which drivers under the age of 25 are involved, are their fault. As such, the insurance company that insures the driver will have to cover the losses for both vehicles. This can be very expensive and as a result insurance companies inflate the premiums for high-risk young drivers. Unfortunately, young drivers also have the least amount of money available to spend on insurance. There are ways of keeping the cost of car insurance for young adults down.
Adding your child to your existing car insurance policy may seem like the obvious thing to do when your child starts driving and gets their license. This may, however, turn out to be a rather expensive option. Rather discuss your premium options with your insurance company before you simply add your child to the policy. Although you may have a good driving record and qualify for a multi-vehicle discount, your insurer may view young drivers as being extremely high risk and as such adjust your premium to a very high rate for adding your child.
If you own an expensive car and your child will be driving it, this would most certainly increase your car insurance premium significantly. Getting your child a separate car might be worth the initial capital outlay. If you choose to purchase a cheap second hand vehicle for your child, discuss the cars you are interested in with your insurer. They will be able to assist you in selecting a vehicle that has a lower risk profile, thus lowering the premium. Also identify any additional safety devices that can be installed in the vehicle in order to bring down the premium.
If you decide to purchase a second hand car for your child, you should also shop around for a separate insurance policy. The rate offered by your insurer for adding your child to the policy may be significantly more than the rate offered by another company for your child alone. Speak to your insurer or broker and ask them to compare the cost of adding your child to your existing policy to the cost of taking out a separate policy just for your child. Consider the different cover options available as well. Including a car rental option is probably not as important to your child as it is for you and your spouse.
Finally, enrolling your child in advanced driving classes after they have received their license could lower the premium further. This is especially true if your child does well in the course. Considering the cost of these classes against the monthly insurance rate and excesses in the event of a claim, it could save you hundreds of dollars per year.
Stuart Broad is a marketer who works for a number of South African Insurance sites. If you are looking for a budget insurance, he recommends trying to get motor insurance at CheapCarInsurance.
Stuart Broad has extensive experience in the life insurance industry. He is very passionate about following the developments at insurers like car and motorcycle insurance.View all articles by Stuart Broad
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