Adding Your Teen as a New Driver on Your Car Insurance
Recent statistics show that motor vehicle crashes are now the #1 killer of teens in the United States, and while crashes account for only 2% of all deaths nationwide, they account for a surprising 70% of teen injury deaths. Speed, distraction, fatigue and inexperience, coupled with a lack of seat belt use, are all prevalent factors in these fatal crashes.
Driver Education
Because of the high death toll involved with teen driving, many places have already enacted Graduated Driver Licensing (GDL) laws, which introduce teenage drivers to the road in stages while minimizing risk.
As your teen learns and moves through each phase, proper practice is very important. As a parent or guardian of a new driver, spend as much time as possible helping and teaching your teen good driving habits.
In most areas with GDL laws, your child must complete at least 6 months of driving, and be at least 16 years of age, before they can apply for a standard driver’s license with no restrictions.
Related: All About High-Risk Auto Insurance
Nova Scotia Fraud Laws and Auto Insurance
Insurance statistics show that a young driver is significantly more likely to have an accident than a typical adult driver. As a result, there is usually a higher premium charged for a new driver on their parents’ insurance policy.
There is a temptation then to “forget” to add the new driver to the auto policy or not list the new driver on your renewal questionnaire in order to save money. We caution you against this practice. The State of Nova Scotia has certain fraud laws in this area that will allow an insurance company to deny a claim in the event the driver is an undisclosed household operator.
Co-Signing on a Loan?
When purchasing and financing a new or used car for your growing child, think twice: if you co-sign on a loan for a car that your son or daughter will be driving, you may be held liable if an accident occurs.
Why? Because liability follows the registered owner(s) of a car. If you are listed as a registered owner, you can be held liable in case of an accident, and your assets are in jeopardy, often for the life of the loan.
So what can you do if you’d like to assist your child by helping him or her buy a car? From an insurance standpoint, rather than risk your assets by co-signing, the best solution is to give financial support but to register the car in the child’s name only.
Related: Does At-Fault Accident Affect My Insurance?
Insurance-Friendly Cars For Teens
If you are looking to buy a car for your newly-licensed teen, we recommend a mid-size, slightly older and reliable car with safety features such as airbags or anti-lock brakes.
Insurance companies surcharge young operators in three areas:
- Liability
- Comprehensive (theft)
- Collision (damage caused to the vehicle in an accident
If your teen’s vehicle does not require comprehensive or collision coverage, the premium will be considerably less. Older cars are generally less expensive to insure because they are less expensive to repair.