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Insuring a teen driver is often an
additional cost for many parents. Many companies consider
drivers under the age of 25 a higher risk, and this
often translates into higher premiums. Here are some
tips from the National Association of Insurance Commissioners
(NAIC) to help you get the best value for your auto
insurance dollar.
According to the American Academy of Pediatrics, one-third
of deaths of people ages 16 to 20 are due to motor-vehicle
accidents. That’s more than 5,000 teens a year.
Faced with those statistics, it’s important to
view teen driving as a privilege, not a right.
Insuring a teen driver will result in additional costs
for you, no matter which insurance policy you choose.
However, how well your teen respects the privilege of
driving is a factor you can control. Lay some ground
rules for safe driving before your teen ever gets in
the driver’s seat. Set up driving rules, including:
• Hours during which the teen can and cannot drive
• Number of friends allowed in the car at one time
• Number of miles teen is allowed to drive per
day or week
You may also want to consider setting
up a driving contract with your teen. The contract should
clearly list the teen’s duties and responsibilities
when driving and caring for the vehicle and should be
signed by both of you.
You may not want to purchase a car specifically for
your teenager, but adding another driver to your policy
can be costly. For example, if you drive a newer, expensive
sports car, adding a teen driver may considerably raise
your premiums. However, a modestly priced economy car
with liability coverage may be more appropriate for
your teen. Make sure you discuss options with your insurance
agent.
When you call for a quote or fill out an application,
give complete and correct information, such as make,
model and year of the car the teen will be driving.
Since your premium quote will be based on this information,
it is very important that your information be as accurate
and complete as possible.
It pays to shop around before buying insurance. Different
companies can offer noticeably different premiums. For
example, if your child is an honor roll student, passed
a driver’s education course or has a job, some
companies may offer a reduced premium. Some discounts
include:
• Two or more cars on a policy
• Participation in driver education courses
• Good student driver under age 25
• Airbags or other safety equipment
• Anti-theft devices
• Auto/home insurance on same policy or with same
company
You may reduce your auto insurance costs by raising
the deductibles on physical damage (collision and comprehensive)
coverages. Be sure to review your current deductibles
to determine whether you can afford to absorb a larger
portion of your loss in the event of an accident. Also,
consider lowering or eliminating physical damage coverages
on older vehicles — unless a lienholder, such as
a bank, requires it.
Regularly review your policy to make sure the basis
for your premium is as accurate as possible. Here are
some things that can affect your premium:
• Adding or removing a vehicle from your policy
• Teen graduates from high school or reaches the
age 18
For more information, contact your state insurance department.
You can link to your insurance department’s Web
site by visiting www.naic.org.
Click on “State Insurance Web Sites,” then
click on your state.
The National Association of Insurance
Commissioners is a voluntary organization of the chief
insurance regulatory officials of the 50 states, the
District of Columbia and four U.S. territories. The
overriding objectives of state regulators are to protect
consumers and help maintain the financial stability
of the insurance industry. If you would like more information,
please contact the NAIC Communications Department at
(816) 842-3600 or send e-mail to communications@naic.org.
This article is © National Association
of Insurance Commisioners
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