You might want to save money by skipping collision or comprehensive coverage, but remember that teen drivers are statistically more likely to crash. More specifically, the III says parents of teen drivers should never skimp on liability insurance, which pays for damage or injury to others. Driving without liability insurance could expose the driver and parents to the risk of a lawsuit if a crash causes damage or medical expenses that exceed your coverage. The III recommends a minimum liability coverage of $100,000/$300,000/$100,000. Depending on the value of your home and other assets, you may also want to ask your insurance agent about an umbrella policy.
In states where it’s allowed, you may be tempted to exclude a teen driver from your policy for the time that they’re away at college. But credit rating agency Experian warns that if an excluded driver ever borrows your vehicle and gets in a crash—say, during a holiday break—both the driver and policyholder could face serious and expensive consequences that could include policy cancellation, fines, and even jail time.
