Car insurance for families: Finding cheap coverage with multiple drivers

Q: Do car insurance rates go down when you have a baby?

Sometimes. Car insurance companies typically see parents as safer drivers. And because safer drivers carry less risk and will likely get into fewer accidents, your car insurance company could lower your insurance premium as a result.

Q: Does car insurance get cheaper after you buy a home?

Generally, yes. Your car insurance can get cheaper after buying a home. Car insurance companies see homeowners as more stable than renters and will often discount your rate even if you don’t have home insurance with them. This rate is small and usually averages out to about 1.5%.

Factors that can affect the cost of car insurance for your family

Buying a new home, changing your living arrangements, marrying, divorcing and adding a teen or new driver to your policy can affect the cost of your family's car insurance.

The main factors that affect car insurance cost for families are:

The year, make and model of vehicles
Tickets or accidents
What state you reside
Age of drivers
Gender
A student driver’s grades
Whether a family has multiple policies with the same company

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Whenever something major changes for your family, it's a good time to shop around and compare car insurance rates. Whether you're a newly licensed driver or a student heading off to college, comparing quotes can save you a significant amount of money.

When there are multiple drivers in a house, car insurance rates can get even more complex.

How much is car insurance for families?

The average cost of full coverage car insurance for a single driver is $2,315 per year.
For a family with two adult drivers and one teen driver, the average is $7,149 a year.
Rates vary depending on the type of car you drive, where you live and more.

"There are so many variables when it comes to car insurance, especially with multiple drivers in the household," says John Espenschied, owner of the Insurance Brokers Group, "I would estimate the average family is paying $300 to $500 for car insurance per month, assuming this includes young drivers and multiple vehicles.

Adding teens on a parent's policy is the cheapest way to go, however.

“It's generally less expensive for parents to add teenagers to their auto insurance policy than it is for teens to purchase one on their own,” says Loretta Worters, vice president of media relations at the Insurance Information Institute. “Rates can increase anywhere from 45% to 60%. By insuring your teenager’s car with your insurer, you may qualify for a multi-vehicle discount, which can offset that amount slightly. That said, insurance companies differ in how they price policies for young drivers, so do some research into prices to be sure to find the best fit for you and your teen.”

Does it matter what car you buy and which car each family member drives?

Yes. The car that each driver is assigned to as the primary driver affects how much you pay to insure that car. And the cost of your car insurance is closely related to the vehicle you choose.

Car insurance companies base rates in part of the value of the vehicle, its safety ratings and its crash statistics. Bear in mind that:

An expensive, powerful car is more expensive to insure
You don't want your teenager listed as the primary driver
If you have fewer cars than drivers, you can avoid listing your teen as the primary driver of any of them

If you're in the market for a family car, keep rates low by:

Choosing a lower-priced vehicle with good safety ratings
Sticking to a less valuable vehicle for teen drivers
Checking insurance rates for the cars you're considering before you buy

Check out our list of the cheapest cars to insure for some ideas.

How to get the cheapest car insurance for families

Shopping around, bundling policies, choosing a cheaper vehicle to insure and discounts are among the easiest ways to reduce your family’s car insurance cost.

And the good news is several car insurances offer discounts that should interest families. It's important that you ask your agent or insurance company about these.

Shop around and compare rates regularly. Rates change over time, so the cheapest company this year may not be the cheapest next year. Take the time to compare quotes annually.

You should also look at the rates if any of these circumstances arise:

Purchasing a new or different car
Combining cars on a multi-car insurance policy
Adding or removing a driver
Marriage
Divorce
Moving
Adding a teen driver
Home purchase
DUI or major violation (more on DUI insurance)
Accident
Change in credit score

Choose a vehicle that’s cheap to insure. Remember that the vehicles you choose factor heavily in the amount you'll pay for insurance.

Bundle policies when you can. Putting your homeowners' or renters' insurance with the same company as your car insurance (often called “bundling”) almost always gets you a better price. In some cases, you can save more than 25% on your liability, collision, and comprehensive coverages.

Increase your deductible. A higher deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim. will mean more money out of your pocket if you need to make a claimAn insurance claim is a request you make to your insurance company for coverage after your car is damaged or you have an accident. You can file a claim online, by phone, or in writing., and that savings on the front end can become expensive should you cause an accident. (See "How much can I save by raising deductibles?").

Multi-car discount - Families with a multi-car insurance plan typically save anywhere from 10% to 25% on their premiums compared to separate policies. You can also stack a home and auto insurance bundle discount on top of a multi-car discount, saving around 15% more on average.

Good student discount - If you've got a student in your family with good grades, you'll likely get a decent discount on your insurance. Most car insurance companies offer a good student discount, both for high school students and college students. A "good student" generally translates into maintaining a "B" (3.0) or better average to qualify for this discount and typically applies to students under 25.

Loyalty discounts - Even sticking with your company can help you save money. Nationwide, Farmers, GEICO, USAA, and Allstate are among those who have handed out loyalty discounts. It'll usually get you about a 10% discount.

Good driver and safe driver discounts - Good driver and safe driver discounts can get you between 5% and 25% in savings, depending on your carrierAn insurance carrier is the company that provides your car insurance policy and pays claims.. Speeding tickets, accidents, drunk driving citations -- all can drive your insurance rates higher. Insurers will check your record to see if you present a risk.

To get the cheapest rates, an insurance company usually requires that you have a clean driving record for at least three years; that means no DUIs, no moving violations, and no at-fault collisions.

Paid-in-full discount - Grab another small discount by paying the annual car insurance bill in full, if you can. That can get you about a 10% savings.

Understand all the car insurance discounts for which you may qualify, so that you can take advantage of some reductions in your bill that can add up.

FAQ: Car insurance for families

How do family auto insurance plans work?

Family car insurance, also known as multi-car insurance, is where you bundle anywhere from two to five vehicles together into one package. Usually, the only rule is that all the vehicles must be at the same address.

Generally, family car insurance costs less than what you’d pay if you bought separate plans for each vehicle. You also get the added benefit of having one deductible and renewal date, which can save you even more money. So, if you’re looking for the best car insurance for families, a multi-car insurance plan is a good place to start.

Do car insurance rates go down when you have a baby?

Sometimes. Car insurance companies typically see parents as safer drivers. And because safer drivers carry less risk and will likely get into fewer accidents, your car insurance company could lower your insurance premiumThe payment required for an insurance policy to remain in force. Auto insurance premiums are quoted for either 6-month or annual policy periods. as a result.

Does car insurance get cheaper after you buy a home?

Generally, yes. Your car insurance can get cheaper after buying a home. Car insurance companies see homeowners as more stable than renters and will often discount your rate even if you don’t have home insurance with them. This rate is small and usually averages out to about 1.5%.

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