Insurance and Teen Drivers

Let's talk about insurance and your teen drivers. Yes, teenagers and driving--it’s not only a tradition, but an actual rite-of-passage and a part of growing up for most people living in the United States, and yes, that means they also need to be insured. And with that, yes, premiums are likely to increase--which makes sense, since coverage will now extend to another driver, and an inexperienced one, at least. Many states, like Illinois, use these factors in pricing the coverage for these young drivers.

Is the driver male or female? Statistically speaking, the CDC (Center for Disease Control and Prevention) records that in 2018, drivers aged 16-19 had a motor vehicle death rate twice as great as female drivers within the same age range, which means twice the risk.

Who’s the Primary Driver? If the car your teen is driving is the family car, then they’re an occasional driver. However, if your teen has her or his own car, it’s quite likely they’ll drive more often than if she or he was sharing it with the family. This increased driving time can lead to higher rates.

Vehicle type--the make and model--always impacts insurance rates. A high end vehicle combined with a new driver will translate into a higher premium.

Still though, there are discounts available for teens: If your teen has taken driver’s education, many insurance carriers provide discounts of approximately 10% for newly-licensed drivers.

Also, if your young driver has at least a B average, many companies provide up to a 20% discount. This has to be verified yearly with a report card.

If you don’t mind having safe driving habits verified (using a device that plugs into your car’s diagnostic port), some companies offer discounts. Generally, the monitoring lasts for a specific period of time, and parents can access the collected data.

Does your young driver attend a school (high school, boarding school, college) that’s more than 100 miles away? Tell your carrier since they can usually provide both a credit as well as coverage when your student is home.

Don’t take the risk of not including your teen driver on the policy--the savings you’ll save is nothing compared to the financially devastating loss that could happen.

The best case scenario is that if your teen causes an accident, and your insurance company decides to cover the claim (which is not a given), you may end up being charged for the “back” premium--the extra cost of insuring your teen--dating back to when his or her license was first issued, and depending on on how long ago that was, that could add up to a significant amount.

However, even if your carrier does cover the claim, there remains the strong possibility that only the state minimum will be covered, leaving you not only severely underinsured, but also severely out of pocket for costs.

But that’s not the worst that could happen. The worst that could happen is the carrier denies the claim entirely, which makes you responsible for all the damages. This includes vehicles, property, injuries to people, any pain and suffering they claim, and even their loss of income, and every single bit of this has to be paid by you.

Take the time to assess what your insurance needs are and provide safety for you and your new driver well into your family’s future.

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