Acquiring auto insurance during your late teenage years and into your 20's can be a nightmare. The costs can be outrageous and can be exacerbated when someone tries to acquire insurance without an insurance background. Here are a few essential things for you to know.
Put your parents on your policy.
You cannot always put your parents on your policy, and this is not helpful in every situation, but whenever possible this could save you a lot of money.
1) They are listed as the titled owner of the vehicle.
2) You reside in their household (or visa-versa).
3) They regularly operate your vehicle.
If they fall into one of those three categories, they can make a big difference in your insurance premiums, and there are almost no downsides.
Most states and insurance companies work on a principle called "driver averaging." What this means is that your insurance company will take the credit score, driving history, and overall risk analysis and average every driver in the household. Then they would apply that score to the vehicle you are trying to insure. So having someone on your policy with good credit and great driving history can cut your policy in half. It can take you from requiring a high-risk policy, or "non-standard," to a premium or "standard" risk policy.
Let's dispel some myths about putting your parents on your policy. Some people believe that by putting your parents on your insurance policy, you make them liable in the event of an accident. This is not the case. If you are under 18 or your parents are the titled owner of the vehicle, they will hold some liability in the event the young driver hurts someone. This cannot be avoided. However, if your parents are not titled owner of the vehicle and you are above the age of 18, then your parents are placed on the policy only as "permissive users."1 This means they can drive your vehicle and will be covered under the policy should they get in an accident. However, it does not extend any liability to them if you are involved in an accident and exceed your coverage.
Your parents do not get control of your policy. Assuming they fall into case 2 or 3, your parents will not get control of your insurance policy. They call not even call to get information regarding your driving history or make any changes to the policy. As a permissive user, they will only gain the ability to request a proof of insurance or inquire about the coverage limits.
Lastly, this will not affect their insurance policy in any way. They will not need to cancel their policy, move their policy to your company, or make any changes to their insurance at all. The only way this may affect them is with carrying over coverages. This means if your parents are involved in an accident that is their fault, and they do not have enough coverage for the accident, your liability coverages could extend over to their policy to help cover the claim.
Whenever possible and beneficial, you should add your parents to your insurance policy. The benefits can be huge with almost no downsides. If you currently sit at a non-standard policy for nothing more then your driving history (or lack of) or credit score, contact some agents to find and get some quotes. You very well may qualify for a standard policy with your parents listed as permissive users, and this can make all the difference in the world.