The insurance impact of young drivers
Adding a newly licensed, youthful driver to your auto policy
can more than double the cost of your insurance. The actual impact on your insurance
varies according to your state's regulations. Insurance premiums for new drivers
may be based on years of driving experience, the driver's age or even the driver's
gender. Young drivers add another peril since some states permit policy cancellations
after such operators suffer a single accident or violation. Instead of questioning
whether this is fair, let's focus on ways to control the "cost" to
your budget and your peace of mind, as well as how to increase the effectiveness
of your insurance.
Methods
for reducing your insurance premiums
- Have your child complete a driver training class. Classes
can be expensive, but you gain the benefits of premiums savings and having
a more competent young driver.
- If possible, take advantage of premium discounts for
good students. Maintaining grades at a "B" or an "Above Average"
grade level typically qualifies for this source of savings.
- Find an insurance company that charges premiums based
on the car your new driver operates most of the time. (Many companies automatically
assign young drivers to the most expensive vehicle).
- Does your child have to drive to school? If so,
expect your company to charge a higher premium for the increased amount of
driving.
- Build a long-term relationship with your insurer. Some
companies reward longevity by forgiving a driver's first accident or minor
traffic violation. It's important to seek companies that have a "friendlier"
philosophy toward young operators.
- Help your son or daughter understand that poor driving
habits can result in higher premiums or a canceled policy. Do everything you
can to avoid the prohibitive expense (and often limited coverage) of substandard
automobile insurance.
- Increase your collision or comprehensive deductibles
or, if you have an older, low-valued vehicle, even eliminate this coverage.
- If your child independently owns a vehicle, he or she
should have their own, separate policy. But be realistic. If you are handling
or sharing the cost of the car and its insurance, it may make since to also
own or co-own the vehicle. Parental or shared ownership permits you to take
advantage of a multiple-car discount. There is another important consideration
discussed later..
- Think carefully about giving a young driver his or her
own car. Coverage for young drivers who have full-time access to a vehicle
is very expensive. Make sure you balance convenience against cost.
Methods for keeping your young driver
safer.
- Consider preparing your child with a course in defensive
driving as a tool for avoiding accidents.(Another benefit is that your insurance
company may give a credit for such classes).
- Require your young driver to understand, sign and comply
with the Youthful Operator Driver Safety Agreement
- Be a proper model by using seat belts and never using
alcohol or drugs.
- Provide your child with a well-maintained vehicle, equipped
with safety devices such as air bags and anti-lock brakes. Also, avoid vehicles
that are prone to being highly damaged in collisions or are vulnerable to
"rolling over."
- Establish firm control over your son or daughter's driving
privileges...don't hesitate to curtail or revoke them in response to poor
behavior.
- Set your own high driving standards and personally test
your young driver's ability to operate a car. YOU must be certain that he
or she can properly pass vehicles, maintain a correct distance, park, merge
and exit, change lanes make turns, obey speed limits and their awareness of
pedestrians. YOU must be responsible for knowing if your child understands
traffic laws and has a healthy respect for the power of the automobile. Don't
let your child become licensed until he or she passes YOUR driving test. Don't
forget to also test your child's ability to drive under adverse conditions
(dark, fog, rain, ice, snow, rush-hour traffic, etc.).
Don't Trade Protection To Save A
Few Dollars.
While it makes sense to save money on insurance...don't
let the pursuit of lower premiums replace the need for proper protection. If
your child has his own car and policy, he or she may be tempted to carry very
low limits of liability. It may be more important to make sure that your young
driver is protected from the financial consequences of causing a serious accident.
Further, you may need to protect yourself since, depending upon circumstances,
you could also be sued for an accident caused by your son or daughter. You might
consider getting higher limits of liability by purchasing an umbrella policy.
The best advice is to talk to an insurance expert about
a strategy to keep your new driver safer and to maintain affordable coverage.
Revised: 11/98
410f002
COPYRIGHT: Insurance Publishing Plus, Inc. 1996
All rights reserved. Production or distribution, whether
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