Reader question:

Hi, I’m sixteen and I need New Jersey auto insurance. I’m still on a learner’s permit for a few months, so do I need teen auto insurance?

Mackenzie

Everyone who drives needs auto insurance.

However, in the state of New Jersey, in order to get an auto insurance policy in your own name, you need to have at least one of the cars on the policy registered under your name as well. It is very important for the names on the registration and on the insurance to match, because if they don’t it could cause a lot of problems when it comes time for a claim or for proof of New Jersey auto insurance to the state department of motor vehicles. However, this is where you come into a dilemma. You can only register a car as soon as your eighteen, and so teen auto insurance in the teen’s name is not an option.

So what do you do?

Well, what I would suggest is that you see if one of your parents’ will add you to their policy. This is how most teenagers end up doing it, and although it does make the adult’s auto insurance policy quite a bit more expensive, it is still much cheaper than it would be if you got a car insurance policy on your own, even if you were allowed. If you do things right, though, there are several ways to make that price lower.

Cheers,

Fashun Guadarrama.

Reader question:

We have an exchange student from Korea living with us and he wants to be able to drive while he’s here. How do we get student auto insurance coverage?

Amy

That is a very interesting question, Amy.

I suppose it all depends on your situation, Amy. The United States has stricter requirements than most countries for getting a driver’s license if you are not here permanently and with a social security number. With all of the recent debate regarding secure borders and immigration, it has been difficult in many states even for legal immigrants who have social security cards and green cards and the works to take their driver’s test and get a license. It really depends on the state, so while I will give you some general advice, it is very important for you to go to your state’s department of motor vehicles to find out what their policy is regarding this.

First of all, does your exchange student have an international driver’s license? While this cannot be used in place of a state issued U.S. driver’s license, it does help when it comes to the training in order to prove that the student already has driver training. In a few states, the requirements are more lax for those who already have a non United States driver’s license, although they still need to prove that they understand U.S. traffic laws.

Many states require that you have a social security number in order to get a driver’s license. This puts many immigrants who are here as students in a bind, especially if they are going to college and thus don’t get an exchange family to help get them from point A to point B during those four years. Most of the states, I believe it’s a total of forty, will work with people who are legally present but are not in the class of immigrants who get a social security number. Things such as the alien number can be given in many cases. Find out from your state DMV what is required. Being a student without an SSN can be tough, but it can be done.

In one state, Tennessee, drivers who are not immigrating to the U.S. permanently have another option to add to all of the above. They can train and take their driving test and everything. However, they cannot be issued a driver’s license. Instead, they are issued a driving certificate. This allows them to drive in the state of Tennessee and it can also be used for identification in many places just like a driver’s license could. This is, of course, a temporary license and does not last as long as a regular driver’s license would. Another state, California, is working on a law that would make it possible to obtain a license without a social security number. While it is primarily targeted at undocumented immigrants, it also stands to benefit many here on temporary work permits and H1B student visas who in some states find themselves making do with the bus.

Once he has a license, it’s easy to get student auto insurance coverage. With a license to drive, he will be treated like any other teenager, even if he has a previous driving record in Korea. That will not be considered in the U.S. Your rates will be higher, but you will be able to add him to your own policy or get him a student auto insurance policy of his own, although it is cheaper to add him to yours. As some advice, AIG auto insurance company is a very good one for foreign born drivers, as they have a special international driver policy for those in this situation.

Cheers,

Fashun Guadarrama.

Reader question:

My son is about to get his license, but will only drive the car very rarely. Am I still required to get teen car insurance rates on my policy?

Malcolm

You sure are.

A car insurance company is a tricky type of dealer of business. One thing they will tell you is that any member of your household is covered on your policy, even if they aren’t listed. They’ll require that you list your spouse, but pretty much everyone else you can leave off. However, they will know when one of those members of your household suddenly moves into a higher risk group. Whether you want to or not, whenever your child gets his driver’s license, your car insurance premium will fatten up more than just a little bit.

It doesn’t matter if the kid will only driver your vehicle now and then. Heck, car insurance companies don’t care if he never drives it at all. As long as he is living under your roof, there is the assumption that it is possible for him to drive your car, he has access to the keys, and someday he will probably take advantage of that. At least this is how car insurance companies think.

Even if you manage to trick your car insurance company into not realizing that you have a teen driver under your roof, they will consider this misrepresentation since you are leaving a high risk driver off in order to avoid the higher teen car insurance rates. That means that if on one of those rare occasions that your son is driving a car and he gets into a car accident, his claim is most likely going to be denied. This means a probable loss of license for him, big fines, and since the damages will probably be too much for him to pay for, either you will pay for it out of pocket, or he will spend the next decade of his life having to pay off the thousands of dollars in damages that he could have saved with an expensive, but much cheaper than that, car insurance policy.

Car insurance coverage is important for everyone, and especially teens. Instead of concentrating on how to avoid paying extra for your son’s car insurance policy, Malcolm, think about how you could pay less. Are you having trouble getting him motivated in school? One of the biggest savers for young people everywhere on car insurance is the good student discount program run by many companies that gets you as much as a 15% discount off of your premium. Make it a requirement to get a B average or above before you son gets to take the car out for a spin, and you’ll see results. While that won’t take off the 100% increase you’re likely to see coming with a young male on your car insurance policy, use other ways to chip it off. Every little bit helps.

Cheers,

Fashun Guadarrama.

Reader question:

If I get a teen car insurance policy, can I get it in my mom’s name?

Grace

Usually you can, Grace.

I know what you’re probably thinking. How do I get a teen car insurance policy without having to pay out most of my paycheck to it? This is a dilemma that many young people run into when it comes to car insurance, considering that at the time of their life when they have to pay the most for it, they are most likely to also be earning much less money then they would later when it’s cheaper. It hurts, but it’s a fact of life. Now, the only way that you can get on your mom’s car insurance policy are if either you live in the same house as her, or if you are named on the insurance policy.

If you live with your mother, than you are covered as a member of her household. Most car insurance companies, probably all, will cover anyone who is part of the policy holders household even if they do not have their name listed on the car insurance policy. The only person that usually can’t get it this way is the spouse, and the only way you can override having to list a spouse is if you have the proof of some sort of legal divorce or separation document.

If you don’t live with your mother, then you are not considered part of her household, so you have to be a named driver on the car insurance policy in order for you to be covered. It is possible to drive your mother’s car without being named, but only if you’re borrowing it, not if it is your main form of transportation. Leaving your name off of the policy while you live away from home and use one of the policy holder’s vehicles as your primary transportation would be considered misrepresentation.

Cheers,

Fashun Guadarrama.

Reader question:

If my daughter has a learner’s permit, does she have to have car insurance?

Ruby

It depends.

Anybody who is driving a vehicle is required to be covered by some form of insurance, but how you choose to go about that is up to you. For example, since she is your daughter, then so long as she is driving a vehicle that is covered under yours or a friend’s auto insurance policy, then she will be covered by that same policy in the event of a car accident. It is not necessary, for most companies, to include your teen driver who does not have her license yet on your car insurance policy, since they will be covered regardless of whether they are listed or not. This is good news for you, especially considering that teen car insurance rates are so high.

However, there are a couple of companies out there that do want a teenager to be listed on the car insurance policy whether they have their license or not, so long as they are legally driving your insured vehicle. In order to avoid this, or at least to know about, you should call your auto insurance agent and ask if the company you are with has what is called a family policy, which means that anyone in your household is covered if they drive the vehicle on your policy. If they are not, you can either consider changing companies or take steps to keep your teen car insurance rates down.

A couple of ways to do this is to raise your deductible, pay all at once instead of in installments, and to make sure that your teen’s name is assigned to the least expensive and safest vehicle on the policy, even if they drive the other car more often. Take care with that one, because many car insurance companies will try to add the most expensive driver to the most expensive vehicle to make your rates go up.

Cheers,

Fashun Guadarrama.

Reader question:

My 17 year old has a driver’s license now, and I know that his insuance is going to cost me. Do I really have to add him?

Amy

Nope.

You don’t absolutely have to add your teenager to your car insurance policy, but so long as they’re going to be driving, they do need to have car insurance coverage. So you need to get them insured some way, and adding them to your policy is a cheaper way to do this, because if they get their own policy then it will be a lot more expensive.

Now, there are several ways that you can keep your car insurance rates down, such as buying your teenager a smaller car that has several safety features and a good safety rating, and also isn’t really new. Another way is to make sure they get good grades in school and take extra driving classes. Check with your car insurance company to see what kinds of discounts they offer, and shop around to get quotes.

Cheers,

Fashun Guadarrama.

Reader question:

I really wish they didn’t let teenagers drive, but they do, and now that my daughter is sixteen, she has a license! Worst of all, she has to be on insurance now. I really need some way to get the prices down for her part of the driver insurance, because teens are charged just too much. Can the impossible be done?

Amber

Hey, it’s not impossible.

It definitely is hard to get cheap student car insurance, and whatever you do, you won’t get as low costs as you would get if you did all the same for yourself, but when you’re insuring your teenager, it’s better to think first in the coverage, and second in the price. Teens, especially those who have just barely received their licenses, have higher accident rates than everybody else, and there is much more room for bad decisions and irresponsibility, so you should make room for that in their car insurance coverage. Getting more coverage for your teenager will get you even higher premiums, that is true, but it will be more cost effective and safer for the both of you.

That doesn’t mean that you have to stick with the first price they give you, though. There are several things you can do to keep your teen’s driving insurance low.

• Keep it in the family.

Some parents might be tempted to get their teenager his or her own car insurance policy in order to build their history and teach them responsibility. However, there are better ways to achieve this. It is cheaper for your teen to be on your car insurance policy, and the rates for a teen car insurance premium are often too much for that fast food job to handle.

• Drive between the dotted lines.

Having and maintaining a good driving history without accidents and without tickets is good for your teen right now and later on in life. It won’t have the most effect until they are nineteen, but it will stil help you get lower prices in the present. It does more good for girls than for boys.

• Pay attention in class.

If your teenager complains about doing their homework, they may be more inclined to do it if they’re paying for their own car insurance policy. Getting good grades can get them a cheap student car insurance discount with most companies, and all that is required is proof of a B average or better. Even if they aren’t paying for their own, you still have control of the keys.

• Always learning.

Think that one driving course is enough? Although research doesn’t show any difference between people who take one driving course and people who take two, insurance companies still lower your rates whenever you take an additional driving education course, such as defensive driving. This are cheap, sometimes even free, and can save you a lot of money.

Not all of these ways of lowering prices are restricted to just teens, but they can go a long way when combined and might even be the key to keeping the prices of your car insurance premium steady.

Cheers,

Fashun Guadarrama.

Reader Question: Is it possible for a 17 year old get his own auto insurance?

That is a very good question! A 17-year-old, although a teenager, is not considered legally able to enter into a contract, but certainly old enough to drive a car on public roads. I suspect that most car insurance companies will require a parent’s signature to validate the contract and to be financially responsible.

I would start making phone calls to local car insurance providers for quotes but there really shouldn’t be any reason that you could not get coverage. Now a huge price tag may be another issue.

You might want to contact the state car insurance bureau or dmv to see what the restrictions there are for a minor to own a car and to to have it insured in your state.