Here’s some good news about auto insurance. Your teen won’t need it until licensed and driving without you or an instructor in the car.
Saving Money on Car Insurance
Once your teen gets a learner’s license, you’ll want to talk to your auto insurance agent about costs and other issues involved in adding your teen to your policy. Because the risk of a crash is significantly higher for teen drivers, particularly during the first year of driving, your teen’s auto insurance rate likely will be higher than your own. Some families also use this time to comparison shop to find the right auto insurance option for them.
Because the risk of a crash is significantly higher for young drivers, particularly during the first year of driving, your teen’s insurance rate likely will be higher than your own. In this phase of the preparing-to-drive process, you may want to consider these strategies to keep your family’s costs down.
|Raise deductibles to lower premiums
Ask your insurance representative how much you could save by increasing your deductible. If you file a claim after raising your deductible, you pay a larger share of the costs, but the savings might be worth it.
|Encourage good grades
Many insurers offer discounts for students with a "B" or higher grade average, and some offer discounts for teens who complete driver's education or defensive driving courses.
Introduce a parent-teen agreement to minimize risks. it won't lower your premiums, but it could prevent a crash or ticket that would increase your rates.
The type of vehicle your teen drives and how you classify your new driver - main or occasional driver of one vehicle, for example , can affect insurance premiums, so begin thinking about these decisions now.
Car Insurance Requirements in Maryland
You are required to carry the following three types of insurance coverage in order to legally drive a vehicle in Maryland:
- Liability insurance pays damages that are caused by you and suffered by the other party for personal injury, death, or property damage. You must carry a minimum of $20,000 for bodily injury per person, $40,000 for bodily injury for two or more people, and $15,000 for property damage.
- Uninsured motorist coverage pays damages, after any applicable deductible that are caused by an uninsured motorist and suffered by you. You must carry a minimum of $20,000 for bodily injury per person, $40,000 for bodily injury or two or more people, and $15,000 for property damage.
- Personal Injury Protection (PIP) coverage provides the benefits for medical, hospital and disability up to $2,500 for all reasonable expenses arising out of an accident. Note: Full PIP provides benefits for you, any member of your family, and any non-family occupant of your vehicle. You may also choose limited PIP, which excludes benefits for you and members of your family age 16 and over. This alternative costs less and should be considered if you already have medical and hospitalization insurance.
Insurance companies in Maryland determine rates on factors such as your driving record, how long you’ve been a licensed driver, how much you drive, where you live and what type of vehicle you drive.
Learn about insurance available through AAA for teen drivers and their families.