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 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."
• 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.

COPYRIGHT: Insurance Publishing Plus, Inc. 2000
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