Car Insurance for Teenagers

Teenagers usually do not comprehend the importance of having a car insurance and understanding why it is required. This article shall enlighten some teenagers and their parents on having car insurances for teenagers.
| Friday, February 06, 2009
When teenagers first start driving, they swiftly discover that car insurance is and will persist to be a prime aspect in their driving lives. Here are the reasons why!

Firstly, they realize that it is mandatory by state laws. In most of the US and UK states, you cannot purchase a car or drive a car without an insurance of your car.

Secondly, they also realize that insurance is an exorbitant affair, particularly for teenagers, and mainly for male teenagers less than 18 years of age.

Why do teenagers need a car insurance?

If you were monetarily wealthy and didn't bother about the hazards of losing a considerable part of your funds, you could self-insure. That implies, you would use your own wealth to pay for dent repairs, a substitute vehicle if your existing vehicle is stolen or damaged, towing and storage expenses, rental car expenses, medical bills connected with an accident, court cases by other parties when it is your liability in an accident that causes damages, injuries, or death. Also attorney's fees and property damages have to be taken care of by you.

On the flip side, for this self sufficient group of people - Why should they risk trading thousands or millions of dollars in a court procedure? Secondly, states have rules requiring accountability insurance as a way of proving fiscal liability. Even though a bank bursting with funds might seem to achieve the same thing, most state laws don't treat it that way. All state laws differ, thus car insurance in New York is not the same as in San Jose.

Yet another reason for having car insurance (for teenagers who buy a car through a loan) is that banks and investment companies are adamant on it. In fact, most entail "full coverage" insurance, which surpass minimum state law requisites. They wish to guard their investment during the time of the loan. If the vehicle is damaged or stolen while they still have money invested, they wish to be sure they are paid first.

Types of car insurance for Teenagers

Mentioned below are few types of car insurance:
  • Accountability - Defense from hazards linked with property damage and private damage to others. Devoid of insurance, an accident could easily wreck a family life. For this motive, accountability coverage is the most vital part of such a policy. Accountability insurance is mandatory by law in most states.
  • Complete - Security from the price of non-collision damages, wreckage, thievery, weather-related disasters, or natural calamities. Complete and compact coverage usually pays for the expenses of repairs. In case that the car is completely damaged or stolen, the cost of a substitute vehicle is at "cash price" of the old car.
  • Crash - Defense from the expenses of mending damages to your own car. A deductible reduces the amount you are paid and also lessens the premium charge. If the expense of mending surpasses about 75% of the worth of the car, the insurance company may come to a decision to "sum" the car and compensate fair-market substitute cost.
  • Medical - Pays medical expenses to you or other parties for accidental damages connected with your car. There are restrictions mentioned in your policy concerning highest amounts paid for each occurrence.
  • Uninsured Motorist - Security from expenses connected with an accident caused by a different driver with inadequate accountability coverage or no accountability coverage.
  • Hauling and manual labor - Pays cost of hauling and storing your broken or disable car.
  • Rental refunds - Pays cost of leasing a substitute car after an accident.
  • Gap Coverage - Pays the variation between the amount billed on a loan or lease and the "cash worth" paid by your insurance company in case of theft, fire or an accident.

How much coverage your teenagers require?

Many people consider auto insurance as an indispensable malevolence and purchase as little coverage as they can to curtail costs. If you purchase a car with a loan or lease, the investment company may dictate lowest coverage requisites. They may even tell you the highest deductible you can select. However you can add extra liability coverage, which can be a wise thing to do in these days of multi-million dollar legal settlements, particularly when medical costs are implicated. Many policies merely cover $50,000 or less. If your car insurance policy doesn't envelop the full expense of a large settlement, you are individually accountable for the remnants.

Many insurance agencies review your credit score and propose lower rates to people with high credit scores like 700 and above. For this, you must know your FICO® credit rating before you start shopping for insurance.

Whose policy is it anyhow?

Until your teenager becomes 18 years old, he/she cannot purchase insurance on their own. Thus, most teens are basically added to their parents' policy, which is less costly than an individual policy. Many teenagers feel that they will simply not notify the parents' insurance agency and shun the high cost which is not a very smart move though. It might work until just first time the teenager is implicated in an accident. At that stage, the insurance agency can and will announce no liability to cover the costs or lawsuits connected with that accident - and will probably withdraw the parents' policy.

What is the cost of car insurance for teenagers?

It depends on the type of car, how much and where the car is driven, for what reason it is driven, and what concessions apply. Additionally, insurance agencies are synchronized by state laws and rates can vary extensively across states. In few cases, a teenager might pay as little as $500 a year while in other cases he might pay $3000 a year or more.


From prom dresses and football camps to endless parties - The maintenance of teenagers' everyday expenditures can be monetarily intimidating. Providentially, value auto insurance is one buy that parents can find in the good deal. Because young drivers are known to be rash drivers, you might feel that cheap insurance isn't an alternative. If you know where to shop, you may discover a completely reasonable price for auto insurance. Winding up, your teenager needs car insurance to defend her/him, protect your funds, defend your family, defend your finance company and defend other parties and property for which you might be accountable. In the end, car insurance for teenagers is all about defense.

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