Reduce The Impact Of Your Child's Accidents On Your Auto Insurance Premiums

Written by Ryan Lowell on March 31, 2011 & Posted in Insurance

Auto insurance expert Ryan Lowell fields a question from a consumer, who wants to know how to keep a child's accident from sending his car insurance premiums from soaring sky high.

Got a kid who crashes? Minimize the impact to your auto insurance policy.

Dear Ryan,

My 19-year-old son just had another fender-bender-- his third in the last two years. Our premiums were already high; I can't imagine what they will be now. How can I make my insurance cheaper?

Trevor R. St. Louis, MO

Dear Trevor,

I feel for you. Adding a youthful driver to an auto insurance policy is expensive, and when that youthful driver begins to rack up claims the additional auto insurance premiums can be unbearable. There are a few things you can do that may help drive down the cost of your policy.

Talk to your agent about splitting Junior off on his own policy. At his young age, his future earnings are likely his only asset worth protecting. He can carry lower limits of liability than you can, and since he is an adult you should be insulated from any lawsuit against him. If your name is on the title of the car, this option is out, so you may want to consider giving him the car. Without his driving record affecting your policy, your premiums should drop.

If you can't remove him from the policy, you may save money by increasing the comprehensive and collision deductibles on his car, or dropping coverage for damage to his auto altogether. Find out the book value of his car to determine if it is worth the risk.
Up until now, I have been assuming Junior has his own car. If you have more drivers than cars in a family, most auto insurance companies will rate Junior on the most expensive car in the stable. You could save a fortune by buying a cheap car for Junior and only carrying liability coverage on that car. He can then be rated as the primary driver of this car, not yours, dropping your premiums. He would still be covered driving your car.

Now for some tough love. There is no upside to you carrying Junior on your policy. His driving could get your policy cancelled or non-renewed. He is an adult, and I recommend you split him off on his own policy. Even if you have to subsidize his premiums to keep it affordable for Junior, you are insulating yourself from future insurance trouble his driving habits could cause.

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