Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like and Safeco. He reviews content, ensuring that exis...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 10, 2020

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Things to Remember...

  • It’s against the law to drive without some type of auto insurance coverage
  • Liability is the lowest amount of coverage you can buy
  • Comprehensive will cover you and your car in case of an accident
  • There are likely many different types of drivers in a given family that require different insurance

Auto insurance is a mandatory requirement for all licensed drivers in the United States.

While a young single person might want to pay the very minimum mandated by their state of residence, his or her insurance needs are likely to change as they get married and have children.

One of the most common auto insurance options for families today is a group package that covers all members of the household. This policy option may provide savings on insurance to your household.

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Understanding Family Auto Insurance Plans


A family auto insurance plan is meant to protect all driving members, who belong to the same household.

Whether you are newly married or are parents of teenagers, family auto insurance plans can be tailored to meet all your needs.

It is important to remember that insurance plans need to be modified as your family grows.

For instance, new parents are likely to be more distracted while driving because of a crying baby or lack of sleep.

At this stage of life, it might be prudent to get more coverage.

Similarly, if your teenager is now a college student and has moved away from home, you should inform your insurance company.

If your teen is going to drive the car only during holidays, it will bring your family insurance cost down substantially.

After all, according to MSN Autos, adding your teen daughter is likely to double your insurance bill while a teenage son can triple your costs! So it is important to clearly articulate your insurance needs before signing on the dotted line of your family insurance plan.

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Enter your ZIP code below to view companies that have cheap auto insurance rates.

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Different Forms of Insurance Coverage

Much like an individual policy, family insurance has different forms of coverage. While some of them are mandatory, others are fashioned to provide you with some additional protective cushion.

Liability insurance (LI): This is the most basic form of insurance that is mandated by most states. It covers all damages caused to the other driver when the insurance policyholder is at fault in the accident.

LI pays to:

  • Repair or replace the vehicles damaged or totaled in the crash
  • Repair all property damage including traffic lights, signage, residential or business buildings
  • Cover the medical costs incurred for treating those injured in the accident

It also covers funeral costs in case of a death caused by the accident.

For instance, California requires the following coverage per accident: $15,000 for injury/death to one person, $30,000 for injury/death to more than one person, $5000 for damage to property.

Collision insurance is meant to protect your car in case of a collision.

It covers the repair costs if your car is damaged in a collision or gives you its market value to help towards its replacement in case it is totaled.

As a report on NPR sleep-deprived-new-parents-dont-have-to-hit-the-sleeping-pill-bottle finds, sleep-deprived new parents are more likely to have accidents.

If you have teenagers driving expensive or new cars, collision insurance is highly recommended.

Comprehensive insurance covers all repair or replacement costs of your car if it has been damaged or wrecked by any non-collision factor.

From a stray deer hitting your car; theft; vandalism; Acts of God such as tornadoes, flash floods, snowstorms, hurricanes, and earthquakes; to the unlikely event of a meteor hitting your car, comprehensive insurance will cover all your car-related damages.

However, you should be aware that it does not cover anything that is inside such as laptops or your personal paraphernalia.

If you are driving a new car, a luxury car or have financed your auto purchase, it makes financial sense to get this rather expensive form of insurance.

Uninsured or underinsured motorist insurance helps those who are nto able to afford more expense policies.

According to USA Today, 1 one in seven drivers are driving without insurance.This has cost insured drivers a whopping $10.8 billion in 2007. Those dollar figures continue to rise, as insurance costs soar.

Personal injury protection is meant to cover the treatment costs for all injuries caused by the accident.

Pay-as-you-go insurance charges drivers based on their driving record and the number of miles traveled.

Given the range of options available, it is important that you carefully decide which forms of coverage you require. Opting for family coverage can provide you with multiple advantages.

Reason 1: Family Packages Impacts Insurance Cost


The insurance industry is constantly looking to increase the number of customers they can serve.

If you have multiple drivers and cars in your household, you are likely to get a very good price for your family insurance.

This is especially so if every member has a good driving record as well as high credit scores.

If one of the drivers has a relatively poor driving record or FICO score, it will raise your cost, but it might still be cheaper than getting an individual insurance policy.

Family insurance plans are very flexible and can be changed easily to reflect the changes in your family situation.

For instance, if your grown son or daughter is visiting for a short time and will drive your car, your family insurance plan should be able to cover them without increasing your insurance costs.

Reason 2: Insuring Your Teenagers

Teenage drivers are expensive to insure. If you had to get your teenage son or daughter individual insurance for a new car, you are looking at shelling out top dollar.

It is also advisable to limit your teenager to the most inexpensive car you own.

This will save you some money. If you are going to get your teenager a used car, make sure you get it thoroughly inspected by a trusted and certified auto mechanic.

It is especially important to make sure that the seat belts, airbags, brakes, headlights, and wipers are in good working condition since they undergo relatively rapid wear and tear.

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Reason 3: Discounts


Another price busting reason to get family insurance discounts. Most insurance companies will give you a hefty discount for insuring multiple vehicles and drivers with them.

Additionally, other discounts for low mileage, good students, and good drivers have become commonplace.

You should research your options for additional discounts meant for specific groups such as veterans, older citizens, and college graduates, among others.

Lowering Family Auto Insurance Costs

Family auto insurance should be treated as a joint responsibility.

All insured members of the household should be educated in the matters of auto insurance, including how to keep the costs low.

The most important step towards lowering costs or maintaining low insurance bills is a clean driving record. All family members should drive carefully.

Clean driving records are magnets for low insurance costs.

Talk to your teenagers about the folly of texting while driving. Increasing numbers of accidents are occurring due to cell phone usage by teenage drivers.

As DUIs among teens rises, Mothers Against Drunk Driving, states that a third of road accidents that kill teenagers are alcohol related. Not only is teenage alcohol consumption illegal but drinking and driving can devastate their lives if they get involved in an accident.

Also, talk to your teenagers about getting good grades in school or university if you want to save money on premiums.

If you are planning to buy a new car for your family, make sure it has high safety ratings and crash test ratings. The Insurance Institute for Highway Safety releases ratings every year.

Good ratings help lower your insurance costs.

Additionally, do some research to look into how much it would cost to insure the make, model and year of the car you are interested in buying.

Another easy way to reduce your insurance cost is to drop comprehensive and collision coverage for your older cars.

If you have teenage drivers, assign them the older cars. This will help you save some money.

You might consider raising your deductible to the maximum you can. Make sure you can afford to pay the deductible in case of an accident.

A high deductible also makes it more difficult to file small claims, which shows up in your records for up to five years. However, every member of the household should drive carefully to avoid dents and small damages.

Buying the Right Family Auto Insurance


Comparison-shopping is the key to getting the best insurance package for your family.

Whether you talk to an agent, use a consolidation insurance website or a company website; make sure you know exactly what you need.

Do not hesitate to ask questions. After all, it is your family that you are protecting and your money that is being used!

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