Every day we get calls from clients whose son or daughter will be getting a learner’s permit or driver’s license soon asking questions about the process and the rates. There are lots of variables so it is always a good idea to call your agent to discuss your personal situation before you make changes. Here are some of the most common questions we get are ask:
Question: When do I have to add my teen driver to my auto insurance policy?
Answer: In the state of North Carolina you don’t have to add your young driver to your policy until the Limited Provisional License is obtained. Before the young driver goes for the test for this license you need to get a form called a DL-123 from your agent. need to take a printed copy to the DMV.
Question: What is a DL-123 and why do I need it?
Answer: The DL-123 is a form that shows the driver has personal auto insurance in the state of North Carolina. You need the form when you go to take the Limited Provisional License driver’s test. The form is good form is good for 30 days then it expires so you can call in advance to get it. You will need to take a printed copy to the DMV. The DL-123 satisfies the poof of liability insurance coverage requirement.
Question: How long will I have to pay a higher rate for my teen driver?
Answer: The first year a young driver is added to a policy is the most expensive. The second year of experience is less and the third year of driving experience will cost less. As soon as the driver has a full 3 years of driving experience the rate is reduced to the same rate for any other adult driver. Some insurance carriers will automatically reduce the rate during the month the young driver has a full year of experience. Other insurance carriers will wait until the policy renews which can cost you more money over the 3-year period.
Question: What is the least expensive car to purchase for my teen driver?
Answer: This is a question we get ask frequently. If you decide you would like to purchase your young driver a car of his/her own the least expensive way is to buy a car that you don’t have to insure the car itself. You would have to pay cash for the car because a bank loan will require physical damage coverage. If you pay cash for the car it is your decision if you want to carry comprehensive and collision. Because of the inexperience of the driver those are the coverages that are the most expensive. If you choose not to carry them you are self-insuring so if there is any damage at all to the car you will have to pay for it out of pocket.
If you decide to buy a car that you will want to have physical damage coverage it is best to call your agent before you buy the car to talk about the coverage and see what the charge would be so you are not surprised. Most mid-size cars are the same but there are a few the insurance will cost more for.
You can check out the North Carolina DMV website for additional info on the steps to get your North Carolina license by clicking here.