Adding a Car on a Family Insurance Policy

Every time you buy a new car, you have to update your auto insurance policy. Usually it's as simple as calling your insurance agent and telling him or her the make and model of the car as well as the VIN number and the current mileage, but there are several things you should consider before you make this adjustment.

Who will drive the new car?

The fewer people who drive a new car, the lower your family insurance policy premium will be. Insurance companies allow you to name the insureds on any policy, and on any vehicle within that policy. Of course, if you have named insureds that don't include certain drivers in your household, those people will likely be excluded from the policy.

In other words, if you've added a car to your family insurance policy for your daughter Sally, but your son Henry won't drive the car, you can leave him off the policy for that vehicle. However, the insurance company will most likely require that Henry be an exclusion, which means that if he drives the car and gets into an accident, the insurance won't cover him.

How old are your insured drivers?

Many times, adding a car on a family insurance policy occurs because one of the children in that family has reached driving age. In this case, you can expect your premiums to skyrocket because teenagers are notoriously poor drivers. The insurance company assumes a greater risk, and therefore charges you more.

This is why it is important to do your research before adding a car to your family insurance policy. Preferably before you even buy the car. Some vehicles cost much less to insure by virtue of their size, safety ratings, or other qualities, and this can help keep your premiums low.

What is the grace period?

Before adding a car on a family insurance policy, you might have a grace period. This means that you are covered on any new car for a certain period of time, which gives you the opportunity to bring the car home before calling your agent and making arrangements to insure that vehicle.

According to CarInsurance.com, the level of coverage is usually the same as the car you traded in or the other cars on your policy. In other words, if you only carry liability insurance on your older vehicles, and you purchase a new car, it's best to call your agent beforehand so you're fully covered.

The best course of action is to keep your family insurance agent up-to-date on your progress of buying a new car. Inform him or her immediately upon purchase, and ensure your coverage levels are adequate for whatever vehicle you've bought.