The insurance impact of young drivers
Adding a new young 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 driving experience, age or even gender. Young drivers add another
peril since some states permit policy cancellations after such operators suffer
a single accident or violation. So let's focus on ways to control a young driver's
impact on your insurance premium and your peace of mind.
Reducing
your insurance premiums
- Have your child complete a driver training class.
Classes can be expensive, but you save on premiums and develop a more competent
young driver.
- Seek premium discounts given by many insurers
to students who maintain above-average grades.
- 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.
- 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 policy deductibles or, for older
vehicles, consider eliminating this coverage.
- If your child owns a vehicle, he or she should
have a separate policy. However, if you share the cost of the car and its
insurance, it may make sense to also own or co-own the vehicle. Your ownership
interest lets you take advantage of a multiple-car discount.
- 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.
Keeping your young driver safer
- Consider preparing your child with a course in
defensive driving as a tool for avoiding accidents and ask your insurer if
it gives a premium credit for such classes.
- Require your young driver to understand, sign
and comply with a 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."
- Control your child's driving privileges...don't
hesitate to curtail or revoke them in response to poor behavior.
- Set high driving standards and test your young
driver. 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 be aware 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.
You must not let the pursuit of lower premiums replace
the need for proper protection. It's important that your young driver is protected
from the financial consequences of causing a serious accident. Further, you
may need to protect yourself since 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: 12/99
410f002b
COPYRIGHT: Insurance Publishing Plus, Inc. 1996,
1998, 1999
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