All members of your family driving your vehicle should be included in the auto insurance policy covering your car. After all, it pays to be cautious and prepared, and you’ll be in less financial risk if your insurance company acknowledges the person involved in an auto accident as someone covered by the insurance policy.
However, the rules can get confusing when it comes to teenagers—particularly those who are just driving on a learner’s permit. In Michigan, teenagers driving on a learner’s permit are not legally required to be enrolled in the family’s car insurance policy when driving the family vehicle. However, that doesn’t mean that they are automatically covered in the insurance policy should they get involved in a car accident.
There are various insurance companies in Michigan. They all have different provisions when it comes to covering uninsured teenagers involved in auto accidents.
Some car insurance companies need to have everyone registered on the insurance policy for them to be acknowledged. To be better prepared when it comes to accidents, you should study the contractual provisions of your insurance policy to see what it says about covering teenagers driving on a learner’s permit.
Auto Insurance Laws for Minors in Michigan
All individuals (including minors) that own vehicles in Michigan are required to have an insurance policy with the following minimum coverage:
$50,000 – bodily injury per person per accident
$100,000 – for all persons per crash
$10,000 – property damage liability
However, while these are the minimum rates, people are encouraged to seek insurance policies with higher limits to make sure that they are less vulnerable from financial risk if they ever get involved in an accident.
Considerations When Adding Your Teen under Your Auto Insurance Policy
You should definitely consider adding your teenager to your car insurance policy once they’ve acquired a learner’s permit. Here are some issues to consider when thinking about involving your teen driver in your family’s insurance policy:
- Inform your car insurance company of the change
Once you plan to include your teen under your family’s insurance policy, you should involve your insurance company as soon as possible. Listing your child in the insurance policy ensures that the insurance company will cover and recognize your teen if they ever get involved in an auto accident.
Choose the optimal coverage for your teen driver
It has been mentioned earlier that there’s a minimum requirement needed if you want to register for car insurance as a minor. However, it is recommended that you choose a plan higher than the minimum. This helps make sure that you’re covered in case you get involved in an accident with thousands of dollars in damages. Adding an Umbrella policy is another way to cover items that exceed these limits.
If your child wants to wait to get a license that will certainly save you money. However, don’t be surprised if your insurance company asks you about your teen and if he is licensed. Insurers receive reports that list residents at your address and will know you have a teenager. If your child doesn’t have a permit or license, your insurance company may still list him on the policy, but as unlicensed and unrated. That won’t affect your premiums.
Saving money on teen car insurance rates
High rates caused by adding a teenager to car insurance can be lessened, at least a bit, by getting discounts. Here are the common discounts teens or your household can receive that various companies provide:
Good student discount – Insurers advertise discounts of anywhere from 5 to 25% if your young driver does well in high school or college, typically defined as obtaining a GPA of 3.0 or above or ranking in the top 20% of their class.
Good driver discount – Keeping a clean record will allow your child to eventually receive a good driver discount, normally of 10 to 25%, though insurers may require the person be licensed and with a clean license for three to five years.
Family plan discount – Some auto insurers offer a discount specifically for unmarried young adults under age 21 who live with their parents. Also, some insurers give discounts for young drivers who obtain their own insurance plan with their parents’ insurer.
Student away discount – If your child goes off to college more than 100 miles away from your home and without a car, many insurance companies will offer a discount. The discount varies greatly from 5% to up to 35%, depending on your insurer.
Learning to drive is an important milestone in a young person’s life. Give us a call if you have any questions, we are here to make sure you and your teen are protected.