Car insurance can seem expensive to parents. But when your kids' safety is at stake, the price doesn't really matter at all. But there are things to think about when deciding whether to include your children on your policy or buy a separate one for them. And sometimes it's hard to figure out what to do.
To help you make a decision, you should think about the following things and decide which is best for you:
Cheaper rate: Auto insurance companies always offer a cheaper rate when the insurance for a second car is added to the policy of the parent who owns the first car. Also, older, married drivers are thought to be less likely to get into an accident than younger, single drivers. So, if your child wants to buy car insurance in his or her own name, he or she will have to pay more.
Discount: If you used to own one car and now own two, you can get a discount for having both cars insured by the same company. On top of that, if your child is still in school, you can also get a great student discount.
Higher limits of liability: When you buy your child's car insurance in his or her name, you might be tempted to lower the premium and, as a result, the limits of liability (regardless of who is going to pay). But if you decide to add your child's vehicle to your policy, it will automatically get the same coverage limits as your vehicle. Since you have personal assets, you can have higher liability limits, which means that your child's car is better protected under your name.
Control: Since you own the policy, you'll be the first to know when the auto insurance company sends out communications and notices.
Liability and Responsibility: If your child's auto insurance is covered by your policy, and he or she causes an accident, you will be responsible for everything. There is a chance that people will find out about your assets. Even if your child is to blame for an accident, you can still be sued. On the other hand, if you buy him auto insurance under his or her name, you can avoid all of these.
Surcharges: Since you own the policy, if your child gets in an accident or gets a ticket for a traffic violation, all of the bad things will count against your policy. This will hurt your status as a policyholder. There is a chance that your policy could be cancelled if the crime is serious or if it happens often. In the end, you will have to take responsibility for what your child does.
Your child has to learn things in one way or another, like how to buy his or her own car insurance and the responsibilities that come with it.
You know your child better than anyone else, so it's important to think about these things before making a decision. So, it's important to think carefully about whether you should include your children on your policy or let each of them buy their own.
