Buying Guide for Auto Insurance for Your Teenager

Will You Need a Bank Loan to Insure Your Teenage Driver?

No question about it, auto insurance for your teenage driver can cost a bundle, depending on the circumstances. Unlike many other types of insurance, you have no choice but to have auto insurance on your vehicles. It's a legal requirement. There is a common misconception among parents of new teenage drivers that the teens should be put on a separate auto insurance policy with lower bodily injury limits. The purpose is to save money on the policy and to keep the teen's driving mishaps off the parents' auto insurance record. But the fact is, if a minor teenage driver has an accident, an injured party whose damage is not covered by the low limits of the teenage driver's auto insurance will most likely go after the assets of the parents anyway. If that happens and you don't have a big stash of cash to cover the damages, your house might be in jeopardy. Inexperienced teenage drivers have a much higher rate of accidents than experienced drivers. In fact, insurance agents can tell you, a very high percentage of teenage drivers wreck their first car. So don't risk your personal assets by skimping on bodily injury limits.

What Does a Basic Auto Insurance Policy Cover for Your Teenage Driver?

Bodily Injury Liability- covers injuries that your teenage driver causes to others. If your teenage drivers are listed on your auto insurance policy, they are also covered if they cause accidents while driving someone else's car (assuming the owner of the car has granted permission). Without adequate bodily injury liability, if your teenage driver gets into a serious accident, you can be sued for a great deal of money. That's why it's not smart to limit this coverage to the state minimum.

Medical Payments or Personal Injury Protection (PIP) - pays for treatment of injuries to your teenage driver and passengers in the car.

Property Damage Liability - pays for damage your teenage driver causes to someone else's property. That usually refers to another car, but could be damage caused to fences, light posts, and other structures.