Insuring a Teen Driver
Well the kids are back to school and some of you parents may be dealing with new drivers this year. You knew the time would come and have probably been dreading it since you bought them their first baby teething key set. What you may be dreading just as much is the effect it will have on your insurance. This blog entry will not go into depth on the dangers of teen driving and risk management of your new driver; we're sure you're already giving them your own lessons on that. This will help describe some of the things you can to to protect your insurance rates while protecting your teen driver.
Focus on grades. Most carriers have a "good student discount" where 3.0 GPA's or better students can receive hefty discounts. Encourage your kids to keep their grade high not only for obvious reasons, but for the savings as well!
Choose the right vehicle. Even if you can afford to get your child a new car and they beg you for one, consider getting a used vehicle that you can afford to self insure for physical damage. There are great and safe used vehicles that will help save hundreds of insurance premium dollars per year vs. a new model.
Limit Usage. Most carriers will rate based on annual mileage. Make a commitment with your teen to limit their driving and check the mileage with them regularly. Carriers are cracking down on tracking mileage and may require proof anyway. This is a good way to keep premium down and limit chance for a loss. Work up from a school only commute to limited personal use once they have proven their abilities.
Limit passengers. This is easier said than done, but do your best to enforce 1-2 only. In California, 16-18 year old drivers are only allowed to drive solo or with passengers if there is an adult (25 year old or older) in the vehicle as well. Studies have shown that accidents are far more likely to occur with multiple teens in a vehicle due to distraction (no surprise there...). Limiting passengers will reduce claims, to keep your rates low and protect your children and their friends from injury.
Be sure you are optimizing discounts. Ask you independent agent about discounts available that you may or may not know about. The biggest is the home and auto discount. When rates go up for adding your teen, you want to be sure you are taking advantage of discounts available.
So what's the average cost to add a teen? In California average rates will rise approximately $1,500 to $2,000 per year. Rates can be higher depending on the vehicle they will be driving. This seems high, but insurance companies know that new drivers cause accidents and charge appropriate premium. Have questions about insuring your teen driver, contact us! BayRisk's personal client department has been insuring Bay Area families for decades and can help.