What auto insurance coverage do I need with a newborn?

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New parents may be in panic mode as they prepare to bring their new bundle of joy home from the hospital. The nine months that parents have to prepare for the new baby flies by when you worry about buying all the necessities associated with parenthood.

Having a baby not only increases stress that can have an impact on life insurance, but it can also affect your auto insurance rates. Though being a parent is not a rating factor, numerous rating variables might affect the price you pay for insurance.

Once you’ve learned all there is to know about taking care of a baby and purchased all the baby supplies you need, you should take the time to examine your current auto insurance policy. Below, we will explain the various auto insurance options available to parents and how much these insurance policies cost.

Does having a baby increase or decrease your car insurance?

You may be wondering if there is specific car insurance needed for a newborn and if this will affect your rates. A variety of things influences your personal auto insurance premiums. For instance, you may pay more for insurance as a single driver than you would if you’re married. 

Similarly, your premium rates may drop as you get more driving experience. These variables may reduce rates, but having your first child will not immediately affect your rates unless you change your coverage to protect your growing family better.

What are rating factors, and how do they change after a new baby?

Everyone wants cheap car insurance, but prices are based on your history and your risk. Auto insurers consider several criteria when determining your premiums. Car insurance providers, in reality, set premiums by looking at driver statistics and predicting your risks based on your actual driving habits.

Motorists who are at a higher risk of being involved in a car accident will pay a higher premium for insurance than those considered lower risk. High-risk drivers are usually linked to the following:

  • Accidents in the past 
  • Being uninsured before getting coverage 
  • DUI convictions 
  • Driving a high-horsepower automobile
  • Traffic infractions 
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Alternatively, low-risk drivers tend to be married or a student in a university or other educational program. They also usually have good credit with a car that has safety features.

Parenthood may not be used as a criterion in determining your premiums, but companies use various other variables to tailor your rates. Some of these characteristics can alter due to significant life events, such as having a kid. The rating variables that are used to assign risk classes and rates include: 

  • Driving experience, age, gender, and marital status 
  • Driving habits, car usage, and yearly mileage 
  • Driving history, including accidents and claims 
  • Garaging address 
  • Insurance coverage history
  • Insurance score based on credit 
  • Limits of coverage and coverage choices
  • Occupation or membership in professional organizations 
  • Status as a homeowner 
  • Vehicle type, safety record, and repair cost

The arrival of a baby in your house might alter your life and your rates. If you move to a new ZIP code, start or stop working, or trade in your automobile for a safer vehicle, you should notify your insurance agent as soon as possible. 

Starting a new job, quitting an old one, or working from home might reduce the number of miles you drive each year, lowering your premium. Similarly, moving to a new place with a new ZIP code and purchasing a vehicle with safety features might decrease your insurance costs.

As you can see, welcoming a new baby doesn’t directly affect your premium rates, but the lifestyle changes that are encouraged by a new baby can. 

For example, while you shop for the best baby car seat possible, you may realize you need a vehicle that is car-seat friendly. The new car you purchase to accommodate the new baby needs to have safety features that trigger auto insurance discounts.  

Should I increase my coverage limits after having a child?

Having a child is one of the most significant events in a person’s life, and it may bring about a slew of essential adjustments. Most vehicle owners probably don’t consider how a newborn will affect their car insurance amid their enthusiasm for having a new baby. 

This life-altering shift, however, will influence insurance, especially if you increase your coverage limits. Although your rates will not change automatically after a little one, you should evaluate your vehicle insurance limits and consider increasing your coverage options.

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When you have the minimal minimum coverage limits, increase your liability limits to ensure you are covered appropriately. 

When you own a home or have other assets that a claimant may pursue, it is more critical to increase your limits. You should at least carry $100,000 per person and $300,000 per accident in bodily injury liability, and $100,000 per accident in property damage liability.

Even purchasing a comprehensive insurance policy can be beneficial if you don’t have one active already. With or without children, having just liability insurance puts you at risk, but the effect of an accident is considerably more significant when you have children to look after.

Other additional coverage options that you should consider are uninsured motorist protection, medical payments coverage, and rental car reimbursement. 

Uninsured motorist protection pays your medical bills when you are hit by someone who does not have insurance or has low liability limits. Medical payments coverage covers your medical expenses regardless of who is at fault if you are injured in an automobile accident. 

Lastly, when you experience a covered loss and need a temporary substitute, rental car reimbursement pays for a rental car.

Auto Insurance Coverage Throughout Parenthood

While changing your auto insurance coverage is an option during the newborn stage, it may not be an option once your child becomes a teen driver. 

Having a kid will influence your rates when they are licensed and ready to hit the road. Time goes by fast as a parent, so while you’re searching for the best baby bouncer now, you’ll be searching for a safe car for that same kid before you know it. Preparing for these coverage changes now can save you a lot of stress later.

Sara Routhier is a Managing Editor at the car insurance comparison site, CarInsurance.org. She is passionate about insurance education. She wants her readers to find the best policies at the most affordable rates to meet their specific needs.