You have two options to cover your young drivers. You can add them to your policy or purchase a separate policy for them.
Some companies require everyone living in the household who is of driving age to be added to their policy. Tell the company when someone in your family starts moving or as soon as they turn 16. If you don’t add all the drivers in your family to your policy and the company later finds out, the company may charge you for the additional insurance premium you should have paid. They may also deny you a claim or refuse to renew your policy.
If a teen is the car’s primary driver, the company will base the insurance premium on that car. Otherwise, the company will establish the teen’s insurance premium on the family’s car with the highest price.
Children who are away from home at school or who do not live with you
Some companies require that you keep young drivers on your policy, even if they are away from school. Let your insurance company know if you have a child who lives in another city to attend school. If your child has a car, the company might charge you differently because prices are based on where the vehicle is usually located. If your son doesn’t have a car, she may be able to get a discount on her insurance premium. If your child attends school in another state, check the laws of that state to make sure she has enough liability coverage.
Understand prices and insurance premiums
Texas law requires insurance companies to charge fair, reasonable, and adequate rates for the risks they cover. We do not approve prices in advance, but if we discover that an insurance company’s prices are too high, we may require the company to pay refunds to overcharged individuals. Insurance companies can appeal our decisions.
How do companies decide what they are going to charge me?
Insurance companies use underwriting to decide whether to sell you a policy and how much to charge you. The amount you pay for insurance is called the insurance premium.
Most companies consider the following factors in setting your auto insurance premium:
- Your age. Men under 25 and women under 21 usually have the highest prices. Prices go down as people reach middle age but go up again after age 70.
- Your driving record and claim history. Insurance companies will charge you more if you have accidents or tickets on your driving record. Some companies may refuse to sell you a policy.
- The place where you keep your car. Prices are higher if you live in a city. This is because people in cities are more likely to have accidents or have their vehicles stolen than people who live in rural areas. Prices may also vary between zip codes within the same city.
- The type of car you have. Collision and comprehensive coverage prices are more expensive for luxury cars, performance cars, and sports cars. Prices are also higher for cars that cost more to repair.
- The primary use of your car. If you drive your vehicle to and from work or business, your prices will be higher.
- Your credit score. Some companies use your credit score to decide how much to charge you for the policy.
Your rights
An insurance company cannot:
- Turn you down or charge you more because of your race, color, religion, or national origin.
- Reject you or charge you more because of your age, sex, marital status, geographic location, or disability unless the company can show that you present a greater risk of loss than other people it is willing to insure.
- Refuse you, charge you more, or treat you differently than other people in the same price or risk classification unless the company shows that you present a greater risk of loss than others.
- Turn you down or charge you more solely because of your credit score.
Save money on your insurance
Discounts help reduce the amount of your insurance premium. Each company decides what discounts to offer and the amount of the deal. You could get a deal if:
- You have bags, anti-lock brakes, and anti-theft devices in your car.
- You completed a driver’s education or defensive driving course.
- You have more than one car on a policy.
- You have other policies with the same insurance company.
- He has not filed claims and has a good driving record.
Loss of your insurance
If you request it, a company must explain to you in writing the reasons why it was rejected, canceled, or did not renew your policy. If you believe the company improperly denied, revoked, or failed to renew your policy, you can file a complaint with us.
What happens if a company cancels my policy or does not renew it?
Cancellation means that you or the insurance company ends coverage before the expiration date of your policy. A company must give you ten days’ notice before it will cancel your policy. A company can cancel your policy in the first 60 days for any reason unless the cancellation breaks the law.
An insurance company can cancel your policy at any time if:
- You stop paying your insurance premiums.
- You file a fraudulent claim.
- Your driver’s license or car registration is suspended or revoked (this also applies to other drivers who live with you or use your car).
If you or the company cancel your policy, the company must refund any unearned insurance premium to you within 15 days of cancellation. The unearned insurance premium is what you paid upfront that you didn’t buy coverage. For example, if your insurance premium is $100 a month and you paid six months in advance and cancel your policy after one month, the company owes you $500 for the unearned insurance premium.
Non-renewal means that a company refuses to renew your policy when it expires. In writing, a company must tell you that it will not renew your policy. It must say to you at least 30 days before your policy expires.
A company can refuse to renew your policy only after it has been in force for 12 months. If you bought a six-month policy, the company could not refuse to renew it when the first six months are up. You must renew it to provide you with 12 months of coverage.
A company cannot refuse to renew your policy because of your age, nor can it refuse to renew your policy because you filed claims for:
- Weather damage.
- Damage caused by impact with animals.
- Accidents or incidents for which you cannot reasonably be blamed unless you file more than one such claim within 12 months
- Damage from gravel and other falling or flying objects (the company may increase your deductible if you file three such claims within 36 months).
- Towing and labor claims (the company may refuse to renew your towing and labor coverage if you file four such claims within 36 months)
If you receive a non-renewal or cancellation notice, start shopping for new insurance. Be sure to purchase a new policy before your old policy is canceled to avoid a lapse in your liability coverage.
If you still owe money on your car, your lender will require comprehensive and collision coverage. If you cancel or lose these coverages, your lender will purchase auto physical damage self-interest coverage and add the cost to your loan payment. This coverage is expensive and only protects the lender.
What if I can’t find a company to sell me a policy?
Suppose you can’t find a company willing to sell you a policy. In that case, you can get primary coverage through the Texas Automobile Insurance Plan Association (TAIPA). You may get coverage through TAIPA if two insurance companies have turned you down.
TAIPA offers coverage for liability, personal injury claims, and uninsured and underinsured motorist protection. It does not provide collision coverage, comprehensive coverage, or higher liability limits than the law requires.
TAIPA coverage is more expensive than coverage from other insurance companies. TAIPA also charges more than other companies if you have had tickets or accidents.
If you have coverage through TAIPA and haven’t had a ticket or accident for a year, your rates could decrease. If you have had no violations or accidents for three years, your insurance company must offer you a cheaper policy outside of TAIPA.
To get coverage through TAIPA, talk to your insurance agent.
