Does Having a Baby Lower Car Insurance Rates?

Does having a child affect your car insurance premium? Undoubtedly, once your child gets his/her first driver’s license and you add them to your policy, you can count on your car insurance rates going up. However, as a first-time parent, there are many reasons why your car insurance may actually decrease!

While having a baby doesn’t mean you get to check off the box next to a “first-time parent” field to receive a direct discount, there are some ways that directly and indirectly help you to benefit. Though it may seem like completely random numbers, insurance companies take many factors into account when generating car insurance premium pricing. They use patterns in behavior, personal driving history, car choices, and stage of life as indicators of responsibility, and thus, safer driving. Based on the statistics tied to those factors, they try to determine the likelihood of risk for car theft, accidents, and driving violations; the lower the risk, the lower your insurance rate.  Though you can’t change your personal driving history, there are certain behaviors and choices that are often associated with more responsible drivers, such as:

•    Choosing a car with safety features
•    Having good credit
•    Being a good student
•    Having taken driving lessons
•    Being married

In addition to being responsible drivers, often, couples who have a new baby make certain changes that also directly impact insurance rates and premiums.  To accommodate a baby seat and all the luggage that comes with traveling with a baby, you may choose to purchase a bigger car, which may cause your car insurance rate to go down (generally, a larger car is considered safer in a crash).

To ensure that the car you’re thinking of buying qualifies for a lower insurance rate, check with the Institute for Highway Safety’s (IIHS) Top Safety Picks. If you don’t decide to get a bigger car, you can also add elective safety features, which can lower your rate as well. Or it may be that you decide to keep your current car, but choose to buy a new home as you build your family.  If you purchase home insurance with your car insurance, then you often receive a discount as a bundle price.

You may also want to revise your policy and make changes to your coverage.
Some parents choose to raise the limits or increase coverage to cover potential expenses that may occur if an accident happens. Others may not have as much disposable income due to the expenses of having a new baby, so they decide to pay less on monthly payments by electing to have higher deductibles if something were to happen. Your deductibles directly impact your car insurance rate, so depending on your financial situation, you’ll want to decide what’s right for you.

Though car insurance companies generally assume that having a baby will cause you to be more responsible in your driving because you are:

•    driving less
•    more aware of your surroundings
•    driving more defensively

Although it won’t result in automatic discount, the certain life changes that follow with having a first child may alter your car insurance rate as well.