Questions about teenager and insurance

[springandmac]

My DH and I recently bought DD16 a used, cheap car. We put liability insurance on it so we could get tags and she could practice driving it while she still has her learners. We received a quote from our insurance company that when DD gets her actual license it will cost $641 for 6 months to add her onto our full coverage policy or we can add her on with liability only for $321 for 6 months.

We told her that since we bought the car she had to pay for the insurance and the gas. So we're leaning for the cheapest option for her. Can anyone point out any pros and cons for liability vs. full coverage. Aside from the obvious that if she is the cause of an accident insurance will not pay for her car to be repaired under a liability policy.

 

[creativeamanda]

My DH and I recently bought DD16 a used, cheap car. We put liability insurance on it so we could get tags and she could practice driving it while she still has her learners. We received a quote from our insurance company that when DD gets her actual license it will cost $641 for 6 months to add her onto our full coverage policy or we can add her on with liability only for $321 for 6 months.

We told her that since we bought the car she had to pay for the insurance and the gas. So we're leaning for the cheapest option for her. Can anyone point out any pros and cons for liability vs. full coverage. Aside from the obvious that if she is the cause of an accident insurance will not pay for her car to be repaired under a liability policy.

Under liability only, if she is hurt in an accident, the insurance will not pay medical bills for her, either.

 

[SportsChick]

Under liability only, if she is hurt in an accident, the insurance will not pay medical bills for her, either.

That would depend on the state - here in FL we have to carry PIP, it's mandatory and that would pay medical bills no matter who is at fault (that's Florida's version of no-fault insurance)

 

[kim929]

If she can afford it, I would go for the full coverage. If you break it down, it's really not that much ea week. It would be cheaper then having to replace the car if she did get into an accident.

 

[msmayor]

Talk to the insurance company. If the car is in her name and with liability only, what happens if she's in an accident and the other party sues her for damages the insurance company isn't covering? She may not have any assets now, but if they are able to get a judgment against her it could remain against her for years until it is paid.

 

[stczt]

Its better to be over insured than under insured, ds just got his permit so we are just starting the scary driving thing. We will make sure he has the same insurance we have, full coverage (100/300/100) uninsured motorist, you name it.

 

[swilshire]

If she can afford it, I would go for the full coverage. If you break it down, it's really not that much ea week. It would be cheaper then having to replace the car if she did get into an accident.

That may be true for an adult, but it's a HUGE difference for a teen. My 22yo son is still very expensive, even for just liability. My 24yo daughter, who has full coverage, is about double what my husband and I pay.

If you can afford to replace the car if it gets totalled, stick with liability only. A blanket policy might be a good idea if you're concerned about being sued.

Sheila

 

[dfchelbay]

My DH and I recently bought DD16 a used, cheap car. We put liability insurance on it so we could get tags and she could practice driving it while she still has her learners. We received a quote from our insurance company that when DD gets her actual license it will cost $641 for 6 months to add her onto our full coverage policy or we can add her on with liability only for $321 for 6 months.

We told her that since we bought the car she had to pay for the insurance and the gas. So we're leaning for the cheapest option for her. Can anyone point out any pros and cons for liability vs. full coverage. Aside from the obvious that if she is the cause of an accident insurance will not pay for her car to be repaired under a liability policy.

FYI - Our homeowners insurance went up when our teenager became of age to drive. So, that may happen to you too. They called it "Young Driver in the Home". We have an Umbrella policy as well. You may want to check into getting one of those too. If your DD is a minor at the time of an accident, they may come after you and your assets too, since you are legally responsible for your DD.

 

[dlnsmmy1]

Hi, I am an insurance agent. My advice to one of my customers would be to first decide on the value of the vehicle. Is it worth it to cover it with comprehensive and collision. If it is totalled in an accident are you ok with not getting any reimbursement. That is really the main thing with deciding liability only or not. It doesn't have anything to do with covering her injuries. The liability coverages are for that and that would fall under the Uninsured or underinsured motorist if she is not at fault or optional medical payments which could cover whether she is at fault or not. The bodily injury and property damage you carry will cover another vehicle and its driver and passengers if she is at fault that still is not a factor under comp and collision. You may want to look at increasing your bodily injury and property damage limits if they are low right now, because chances are high that she could have an accident due to being a new driver and you want to make sure you have enough coverage, since she is a minor they could come after you for injury and damage as well if your policy limits run out.

 

[4Seasons]

Hi, I am an insurance agent. My advice to one of my customers would be to first decide on the value of the vehicle. Is it worth it to cover it with comprehensive and collision. If it is totalled in an accident are you ok with not getting any reimbursement. That is really the main thing with deciding liability only or not. It doesn't have anything to do with covering her injuries. The liability coverages are for that and that would fall under the Uninsured or underinsured motorist if she is not at fault or optional medical payments which could cover whether she is at fault or not. The bodily injury and property damage you carry will cover another vehicle and its driver and passengers if she is at fault that still is not a factor under comp and collision. You may want to look at increasing your bodily injury and property damage limits if they are low right now, because chances are high that she could have an accident due to being a new driver and you want to make sure you have enough coverage, since she is a minor they could come after you for injury and damage as well if your policy limits run out.

That's exactly what we've done. DD (17) has a cheap (under $1k) car and we have it insured liability only. We also have (and have had for several years) a $2 million umbrella policy that would pick up (liability) if the insurance limits were exceeded due to a claim. It's fairly inexpensive at about $400/year.

 

[tinatark]

That may be true for an adult, but it's a HUGE difference for a teen. My 22yo son is still very expensive, even for just liability. My 24yo daughter, who has full coverage, is about double what my husband and I pay.

If you can afford to replace the car if it gets totalled, stick with liability only. A blanket policy might be a good idea if you're concerned about being sued.

Sheila

The op said $300 for 6 mos liability only, $600 for full coveage. $100 a month is worth the peace of mind, IMO.

 

[buzz2400]

I just want to put in my two cents. My son who is now 18 got his license when he was 16. Had his own car. Warned him about getting into accident. A few months into having his license he slid on water into another car. got the car repaired and within a month rear ended someone. My insurance is now 4 times what it was. So please warn her to drive very carefully. I am now paying about $5,000 for insurance for myself and my son (he pays for about 1/2 of his) and insurance rates will not drop for a few years.

 

[timmac]

When you say "a cheap" used car, how cheap is cheap? As others have hinted, I think that says it all. The extra $300 over six months is a fair amount to pay. Consider that, if she is at fault in an accident, you'll still have to pay the deductible too, I'm guessing $500. How much above that $800 amount is the car worth?

Though I agree the concerns over having sufficient coverage to avoid being sued are reasonable concerns, this shouldn't be confused with having comp/collision on the vehicle.

 

[clh2]

Talk to the insurance company. If the car is in her name and with liability only, what happens if she's in an accident and the other party sues her for damages the insurance company isn't covering? She may not have any assets now, but if they are able to get a judgment against her it could remain against her for years until it is paid.

The other party isn't going to sue her - they most likely will sue the parents. At least in my state they would.

I agree with a different poster - the coverage on a car your teen is driving should be the same as the cars you and your spouse drive. It isn't cheap...I've got one who is going for her driving test next month.

 

[Toots]

We just added our 16 yr old son last July. We only carry liability on the 2003 Camry he drives. The premium was much lower with only liability coverage.

Our NC credit Union just mailed a news letter this month with insurance tips for adding teenagers. A couple of tips mention: "Providing teenagers an older low value vehicle w/out physical damage coverage for collision & comprehensive losses will help control premium cost." & "Increase policy liability limits to higher levels & consider the purchase of an umbrella excess liability policy of $1 million or more for further protection.."

 

[iNTeNSeBLue98]

We just added collision and comprehensive to a car ('95 Chevy Cavalier Z24) yesterday. DD is 18 and will have her license for a year in July. She is listed as the primary driver of this vehicle. The upgrade in coverage will add an extra $300 for six months ($250 deductible on collision/$100 for comp.) to our policy.

 

[jennyf2]

My son turns 16 on Saturday & he takes his test Monday AM.. I am calling my insurance company tomorrow to see what the difference in cost will be. He is on the "B" honor roll so I know he'll get some sort of discount for that. I'm dreading Monday

 

[springandmac]

To answer some of the questions - We paid $3600 for the car & our current insurance coverage is 100/300/100 with $500 deductable.

I was just thinking that $100 a month plus who knows how much for gas is alot for a teenager to afford. But I didn't think about being liable in a law suit.

DH was in an accident at New Years so he used up our accident forgiveness. Even though the court dismissed the ticket our insurance said they all ready placed him at fault & paid $24000 & closed the case.

 

[SportsChick]

I wish my insurance had been $100 a month at that age. I think I paid close to $250 back then

 

[timmac]

To answer some of the questions - We paid $3600 for the car & our current insurance coverage is 100/300/100 with $500 deductable.

So, the question to ask yourself, is what are the chances of your teen destroying the car within a timeframe of X months. I actually had a hard time finding good data on this, but one source cited 61.4 accidents among 16-year old drivers for every 1,000 drivers (e.g. just over 6%), which is much higher than the overall average (by a factor of 4), but still fairly low. Personally, I wouldn't get collision coverage, but that's just me. We'll see how I feel in about 6 years when my oldest starts learning to drive.

I was just thinking that $100 a month plus who knows how much for gas is alot for a teenager to afford. But I didn't think about being liable in a law suit.

If that's a concern, then consider upping your 100/300 coverage. Collision coverage has nothing to do with your liability to someone else.