Adding Your Teen Driver!
When adding a newly licensed driver to your car insurance policy many parents face sticker shock. When I get that call I normally start my response with are you sitting down, or can you take a baby aspirin or two. There is no easy way to put it adding a teen driver is expensive, it will and should greatly impact your rates. After all, we are talking about a substantial change in the risk involved with your current policy by adding a new driver to it.
I have had this discussion with so many parents over the years when adding a new driver I can do it in my sleep. Below I want to give you a few tips when you are looking to add that new driver:
Good Student Discounts - most carriers offer discounts for at least a B average.
Driver Training - If there is a driver training discount make sure it is added on
Increase your Deductible. - taking that deductible from $500 to $1000 really might make more sense now.
Telematics Devices - A number of carriers offer discounts for signing up for these monitoring programs. These savings can really add up when looking at higher premiums for having a young driver. Just be aware many of these programs have the ability to raise your rates as well based on the driving.
Resident Student or Distant Student- For College age students that are away from home without their car typically more than 100 miles there can be a rate reduction
The right car - I can not stress enough how important this is. If you want to have lower insurance rates for your young driver, find a car that can have basic liability insurance on it. Notice I said lower not cheap. There is nothing cheap about adding young drivers.
Keep a Clean Driving Record - If you think it is expensive adding a young driver with nothing on their record, having one on with accidents or violations will only make it that much worse.
Make Changes to your policy - As we discussed before, raise that deductible, You can look at both comprehensive and collision but most times the collision would make a larger difference. If you have multiple cars, look at dropping rental coverage. If you have an older car consider dropping the collision or both comprehensive and collision and carry basic liability.
Pay in Full - If you can pay your insurance in full this savings can be upwards of 10% or more with some carriers.
Here are some horrible ideas:
The single biggest mistake is this. We just won't add them - I have heard from multiple people that they know someone that said they didn't have to add them. Or that they even talked to another insurance company and that they didn't have to add their newly licensed driver. I will simply say this if you ever have an insurance agent or person from an insurance company tell you this, ask them to send it to you in writing. Better yet ask them to show you in the policy where it states that. Almost every policy I have ever seen states that you are disclosing all drivers in the household and anyone with access to the cars. I have had people that have been insured with me for years call and tell me that another agency has told them this is covered by permissive use. That is not what permissive use is and many companies have unlisted driver exclusions which will exclude anyone in the household that is licensed and not listed. This can be an extremely expensive lesson to learn that you have no coverage. We have had claims denied for this exact situation and that is not a situation you want to find yourself in. If you want your young driver covered they need to be listed.
Lowering liability limits - This seems to happen unintentionally. When new parents start shopping to find "cheaper" insurance after finding out what it costs to add a new driver most of the online systems are set to give basic coverages, limited PIP, and higher deductibles. While raising deductibles isn't a bad idea, lowering the limits of your policy is never a good idea. In fact a better idea would be to raise these limits or even add an umbrella policy. While very few insurance agents would ever recommend that you sacrifice coverages at a time like this we have even seen people bring in quotes that have less than half the current policy coverage and tell us they got the same thing.
Buying a brand new sports car or high end car- While it might feel good to go out and purchase that red convertible for Johnnie...it is going to be extremely expensive. The car or truck that you are insuring is always an important part of the rate and now will even be more important. Call your agent or company and get comparisons for vehicles you are considering. Many times the same make and model can be different based on safety features or options so having the VIN# is important.
Getting a separate policy - We will just exclude him or her from our policy and get them their own policy. This not only is a bad idea and almost of the time it will even cost more since you are not getting the multiple policy discounts, multi car discounts, etc. Also you run the risk of your new driver needing to borrow your other car and them not having any coverage.
As a parent who is getting ready to add a young driver as well I know it is expensive to insure my new driver. Call us! We can look at multiple carriers to look for the best option. Sometimes the current company you are with is the best, other times there might be a better option. We can run comparison with multiple carriers and point out the differences and then point you in the right direction. While there may be a cheaper option it might not be in your best interest. I have been doing this over 20 years and have seen companies that offer a fantastic deal to get you in the door just to raise the rates on the first renewal. Having a young driver there are many things to consider and having someone look at the whole picture and understand what is going on with the local market can greatly help. You wouldn't want to switch to a company that has announced a 20% rate increase and has a early signing discount that will be removed at the first renewal, would you?
