Questions to Ask Your Insurance Agent When Getting a Car for Your Child
Adding your child who is now a teen driver to your household is an exciting and often nerve-racking time. It is very important to consult with your auto insurance agent when adding a new driver into your household. Aside from the difference in the premiums you have to make, there are certain things that only your insurance agent knows that you don’t. So to get the most out of your consultation with the insurance agent, here are a few questions you should ask.
How will my child be covered with my auto insurance?
This question comes in other forms like “Is my teen covered by my insurance?”, “What coverage should I get?”, etc. You can review your insurance policy for this, but you can also ask your insurance agent about the coverage of your car insurance. When you have teens that use your car and still live in the same house as yours, they most definitely should be added to your auto insurance policy. A teen driver usually is not permitted to drive one of your household cars unless they are added as a driver.
Are there discounts for teens and young adults who drive?
There are certain discounts given for teens that have cars. Regardless of your financial status, it is important that you are aware of the discounts given by your insurance company so that you can save some extra bucks.
One example is what you can call “good grades discount”. What this essentially means is that when your child has high grades, say, an average of B or above, then they can be eligible for this discount. Some policies give as high as 35% discount so this is not an opportunity to miss especially when your child is doing well in school. You just have to make yearly updates to your insurer so that they can keep the discount going (because sometimes it can be removed).
Another example is the discount you can get if your child takes driving lessons or safety classes. Not all policies have this so it is best to ask your insurance agent. If there is none, you can also ask for the discount for bundling the auto and home insurance. You can ask for a quotation of how much it will be if you do so.
Does the car insurance policy require that I assign a car to a person?
This question becomes important when you have multiple cars. Some insurance policies require that you assign a person to a car while some don’t. For those that need assignments, you should know that assigning your teen to a less expensive car is the way to go. This is because teens and young adults are costlier to insure compared to adults who have more experience on the road.
On the other hand, if your car insurance policy doesn’t require that you assign cars, then you could compare the premium you have to pay if you get one that needs an assignment from the one that lumps all cars. This is because there is a better chance to save when cars that are less expensive are given to young adults, but when you gave a more expensive car to your teen, then a lumped insurance would be better.
Does your child have collision coverage?
People are often misled regarding their insurance coverage and only find out their coverage is lacking after an accident happens. Insurance agents sometimes use the phrase full coverage, but the term is not very helpful. you should specifically inquire whether there is collision coverage on your teen driver’s car. Collision coverage will pay to replace or repair the vehicle in the event of an accident. Collision coverage is not mandatory in FL and often omitted on many auto insurance policies in order to obtain lower premiums. Be sure to contact Aronberg and Green to be your trusted accident attorneys.
Do you have GAP coverage?
Teen drivers usually have little or no money for a down payment. Putting little money down on a car purchase often means the car will have negative equity when driven off the lot. If the car is involved in an accident and declared a total loss, the insurance company will only pay the fair market value to replace the vehicle regardless of the size of the loan. Since cars a depreciating asset, the payoff owed on the car during the early years is often times greater than the actual replacement value of the car. In the event a car is deemed a total loss, if the loan amount exceeds the value of the car, the driver will be left with no car and stuck with car payments. This is where GAP insurance comes in. GAP insurance will pay the extra money needed to satisfy the full value of the loan in the event the car is deemed a total loss.