Consumer Alert from the NAIC:
Protect Yourself: Insuring Your Teen Driver
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.
- Teen Driver Facts
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.
- Lay the Ground Rules
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:
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.
- 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
- Purchase a Vehicle or Add a Driver?
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
- Give Complete, Correct Information
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.
- Shop Around
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
- 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
- Consider Revising Coverage, Deductibles
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; Update Accordingly
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
- Get More Information
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 Regulators Web Sites," then click on
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.