Does having a child affect car insurance?

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Key takeaways...
  • If you have a child, it will have no immediate effect on your current car insurance rates
  • Driving with babies and adolescents can be riskier because of distractions, but it’s not a legitimate rating factor
  • If your occupation changes after you have a baby, be sure to advise your insurer so that your rating can be updated
  • Always research the cost of insurance in a new area if you plan on moving into a new family-friendly area
  • As the years go by, you’ll have to start budgeting so that you can afford to cover a teen driver in your home

When you find out you’re about to welcome a bundle of joy to your household, you have a lot of planning to do.

No matter how prepared you want to be for parenthood, anyone who has raised children will tell you that you’ll never be ready for the challenges that you’ll face. The best that you can do is be flexible in your expectations.

Having a baby is expensive, especially if you don’t have a good health insurance plan in place. You won’t have to worry about a health rate increase when you’re expecting, but you will have to review your co-pays and deductibles to assess how much you’ll pay out of pocket.

While it’s reasonable to assume your health insurance costs will go up after having a child, you probably never expected that your auto insurance would be impacted. Let’s discuss what you should know.

If life is throwing a curve ball at you and you want to change your auto insurance to safeguard you, start comparison shopping today for better auto insurance rates! Enter your ZIP code above!

Will having a baby change the way your policy is rated?

It’s reasonable to wonder whether or not becoming a parent will impact your rates. After all, when you have a baby on board, you have a lot of new distractions to deal with.

Over time you’ll get used to sudden crying or a toddler throwing a tantrum in the backseat, but there’s still more risk to worry about.

Even though parents face unique risks while they’re driving with their newborns, toddlers, and defiant teens, there’s no insurance rating factor that uses parenthood as a loss predictor.

While there will be distractions, parents tend to drive more safely because they have precious cargo on board. Parenthood isn’t a direct rating factor, but it can have an indirect effect on your rates in the future.

What are some of the most common rating factors used?

All of the risk factors that are used by insurance companies are believed to help predict whether or not their customer will file a loss claim. Some of the risk factors are related to claims and accidents, and others are indirectly related.

If you’re wondering what type of lifestyle changes will lead to a change in premium, here’s a list:

  • Driving record
  • Vehicle type
  • Vehicle safety and alarm features
  • Driving experience
  • Age and gender
  • Occupation
  • Driving habits and mileage
  • Marital status
  • Claims record
  • Credit rating
  • Location of vehicle

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What happens if you move to a new area?

One of the first things that new parents do is look for a new area where they can raise their kids. You may need more space, or you could be looking for a home in a better school district.

Whatever the reason, moving to a new area will affect your auto insurance.

If you’re going to move out of state, you can’t just change your address on your insurance and call it a day. You’ll have to buy an entirely new policy written in the state.

Depending on the accident rate in the state, the rates could be dramatically different. You also have to consider the new state’s mandatory insurance requirements.

When you’re moving to another city or county in your current state, updating your insurance isn’t so difficult. All you’ll have to do is give your insurer your new physical and mailing address.

The zip code will be used to assess the claims rate in the area to give you a new territory rating. If you buy a home, you could save money on your insurance because you’re less of a risk.

What happens if you change occupations?

A lot of life changes come when you have your first child. You start to think about what you want to do for the rest of your life, and you take action to make your dream a reality.

If you plan on changing occupations, you should know that your premiums could change as well. Don’t worry about changing anything if it’s just a temporary change while you’re on leave.

Occupational risk class is a common factor used to predict a loss. You might not think it matters if you’re a consultant or an educator, but insurers do.

Statistics show that some professionals drive under more stressful conditions than others. If you change careers, you need to update your insurance policy.

How will your driving habits change?

When you first have your baby, you might not drive as much as you once did. As your child gets older, you’ll find yourself doing a lot more drop offs and trips to play dates. Your change in driving habits can lead to a change in your insurance expense.

There are two different factors related to driving habits that can change. First is your usage, and second is your mileage.

If you’re going to be a stay-at-home parent, your usage could go from commuter to pleasure user. When you start driving your child to school, it could go from pleasure user to commuter. It all depends on your current class.

You’ll have to assess how many miles you’re driving now and how that will change before updating your odometer. If you don’t predict much of a change, no need to make any updates.

If, however, you’re going to be driving further to work after your move, you do need to update your estimates in the upcoming term.

Having a child will only directly affect your insurance when they are old enough to be licensed. Until then, you don’t have to worry about charges just for being a parent.

When it comes time for your teen to get their permit, you might want to consider shopping around for a better rate. You can get quotes online any time of the day by using a rate quote tool meant for making comparisons. Once you have the estimates, you’ll know what to expect.

If you’ve recently had a child and need better auto insurance rates, compare at least three to four policies to find the best rates for you! Enter your ZIP code below!

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