Car Insurance for Families

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What is car insurance for families?

Because your insurance is modeled after you and your assets, you should consider how having a family can impact your car insurance. Adding your husband or wife to your policy, upgrading your car to accommodate children, and then the "wonderful" time of adding your teen drivers to the family are all hugely impactful to your car insurance and deserve careful analysis. Let’s get to it.

When you begin your family

Moving from boyfriend/girlfriend to husband/wife is a big milestone both personally and for your insurance. Married couples on the same policy are considered to be a more stable insurance customer and are thus rewarded with a lower premium. All other variables constant, married couples save nearly 6% on car insurance annually.

National Average Annual Insurance by Marital Status

Single Married Divorced Widowed
$1,323 $1,249 $1,320 $1,297

Moreover, if you and your spouse are homeowners, you can expect some additional savings as well. Just insurance companies view married couples as more stable, homeowners are seen as less likely to file a claim than renters and when they do file a claim, the claim payout is usually much less expensive. If you bundle your home and auto policy with the same company, you can expect nearly 10% in annual savings.

National Average Annual Insurance by Homeowner Status

Renter Homeowner Renter with Multi-Policy Homeowner with Multi-Policy
$1,323 $1,292 $1,250 $1,181

Together, being a married homeowner can offer you some pretty impressive insurance savings. This will really help as we get into the other aspect of car insurance for families — children.

Having children

Unless your child is driving (which we will get to) there isn’t any immediate impact. Still, if you’re a young family with a coupe convertible, you may consider upgrading your vehicle to something a little more family friendly, like a SUV or a minivan.

National Average Annual Insurance For Vans

Sedan: Chevrolet Cruze SUV: Honda CR-V Van: Honda Odyssey Luxury: Acura RDX
$1,376 $1,232 $1,260 $1,429

For the most popular vehicles in the US listed in our chart, you can see that moving from a sedan to a van can actually save you an average of $116 annually, or $144 if you choose a van.

Having teens

The only thing that might be just as scary as the thought of your teen driving is how expensive they will be to insure. Car insurance companies view teenagers as walking and talking liabilities. Out of any driving pool, teens are the most likely to get into an accident or receive a citation. All of this equates to a high potential for your insurance company having to make a payout — a risk they pass on to you with a high premium.

Average Annual Car Insurance Premiums

Age Group Avg. Annual Premium
16 $6,491
17 $5,403
18 $4,736
19 $3,197

While the sticker shock may take a few seconds to digest, there are some things you can do in the meantime to help with your teen’s premiums:

Keep them on your policy

The figures listed above relate to teens who are entirely on their own. While your premium will most likely jump up hundreds to thousands of dollars, the monetary impact of adding them to your policy will be much less substantial.

Consider the following discounts

Good Student Discount: this discount is pretty straightforward. Insurance companies see students who maintain above a 3.0 GPA as safer drivers and thus reward them with a lower premium. Most insurance companies will require proof (such as a transcript) every policy period as proof. The discount amount varies by company.

Defensive Driver Discount: taking a safe drive course approved by your insurance company can be rewarded with a discount. Regardless if your insurance company gives a discount for this, it’s probably a good idea for your young teen anyway. Discount amount will vary by company.

Good Driver Discount: this discount is automatically added onto your policy if you have a claims free history. Help your teen keep a clean driving record (no citations, tickets, or at-fault accidents) in order to receive this discount. The discount amount often varies by company.

Choose the right vehicle

Don’t let your 16-year-old drive the brand new truck. Teens are historically bad drivers so it’s in your best interest to have them drive a less expensive vehicle such as a used sedan or SUV than something that will require in a higher premium. For a more in-depth look at handling car insurance for teens, see here.

So, what's next?

Your car insurance, or any form of insurance, changes as you and your assets do. Consider any life-changing event as an opportunity to examine your insurance needs. Getting married, buying a home, having a family, and adding your children to your policy are all huge moments as a person and as an insured individual. Shopping around for car insurance for 6 months is a surefire way to ensure you are getting the best rates. Click here to find out if you could be saving.