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Consumer Alert from the NAIC:
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.
1. 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.
2. 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:
• 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
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.
3. 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 agent.
4. 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.
5. 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 discounts include:
• 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
6. 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.
7. 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
8. 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 your state.
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.
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