A New Driver in the Family? It May Be Time to Review More Than Your Auto Insurance

Getting a driver’s license is a big milestone. For teen drivers, it means freedom, independence, and probably a lot fewer rides from Mom and Dad. For parents, it can mean something else: a whole new set of things to worry about. Auto insurance is probably somewhere on that list.

Most parents know that adding a young driver will affect their auto insurance premium. What they may not realize is that a newly licensed driver changes the family’s overall insurance picture. It can affect which vehicles should be insured, how much liability coverage the family should carry, which discounts may be available, and even whether it’s time to consider an umbrella policy.

That’s why a conversation with your independent insurance agent should happen before—or at least around the same time—the new driver gets the keys.

Why Does Insurance Cost More for Teen Drivers?

There’s a reason insurance companies charge more when a young driver is added to a policy: experience matters.

According to the Insurance Institute for Highway Safety, 16- to 19-year-olds have a fatal crash rate per mile driven that’s just over three times the rate for drivers age 20 and older, with the risk highest at ages 16 and 17.

No matter how responsible your teenager may be, there’s simply no substitute for experience behind the wheel. Recognizing hazards, judging distances, driving in snow, merging onto a highway, and knowing how to react when another driver does something unexpected are skills that develop over time.

For families in New Hampshire and throughout New England, there’s another consideration: young drivers may be learning in some challenging conditions. Snow, ice, darkness, winding rural roads, and rapidly changing weather can make that first year of driving especially demanding.

Don’t Wait Until After They Get Their License

One of the best things parents can do is talk with their insurance agent before their child becomes a licensed driver.

Your agent can explain when the young driver needs to be added to the policy, how the change is likely to affect your premium, and whether it makes sense for the teenager to drive an existing family vehicle or another vehicle.

This is also a good time to look for potential savings. Depending on the insurance company, discounts may be available for good students, driver training programs, students attending college away from home, or other factors.

Because independent agents work with multiple insurance companies, they can also determine whether the company that made sense for your family before adding a teen driver is still the best fit afterward.

That’s an important distinction. The least expensive carrier for two experienced adult drivers isn’t necessarily the best value once a 16- or 17-year-old is added to the household.

A Teen Driver Changes Your Liability Exposure

This is the part of the insurance conversation that can easily get overlooked.

Parents naturally focus on what adding a teenager will do to their premium. But it’s equally important to look at the family’s liability limits.

Imagine your teenager causes an accident involving several vehicles and someone is seriously injured. The costs can extend well beyond repairing the cars. There could be ambulance bills, hospitalization, rehabilitation, lost income, legal expenses, and potentially a lawsuit.

Suddenly, that $100,000 or $300,000 liability limit that once seemed like plenty of insurance may not seem nearly as large.

For many families, adding a teenage driver is a good reason to review liability limits across their entire insurance program.

And it’s often the right time to talk about an umbrella policy.

Is It Time for an Umbrella Policy?

An umbrella policy provides additional personal liability protection above the limits of underlying policies such as your auto and homeowners insurance.

For example, if a serious auto accident results in damages that exceed your auto policy’s liability limit, an umbrella policy may provide additional coverage once the underlying limit has been exhausted, subject to the terms and limits of the policy.

If you own a home, have savings or investments, are building retirement assets, or simply want to protect your family’s financial future, a serious liability claim is worth thinking about. Adding an inexperienced driver to the household makes that conversation even more important.

Your independent agent can review your existing home and auto liability limits and determine whether additional protection makes sense.

Before You Hand Over the Keys, Give Us a Call

At Boufford Insurance, we can compare options from multiple insurance companies rather than trying to make one company’s policy fit every family. More importantly, we can help you understand how all the pieces of your insurance work together.

If you have a child approaching driving age, talk with Boufford Insurance before they get their license. We can review your auto coverage, explore potential discounts, look at your liability limits, and discuss whether an umbrella policy makes sense.