College Student and Teen Driver Insurance − Get the Facts
Talk to an auto insurance professional about college student and teen driver insurance, and you'll hear the word “risk” a lot.
And with good reason.
The risk of crash per mile driven is three times higher for 16-19 year olds than for drivers age 65-69.
Additionally, Quadrant Information Services says that “U.S. families who add a young driver to their existing auto insurance policy will see an average annual premium increase of 80 percent.”
So what are parents to do when trying to cut the best auto insurance deal when shopping for college student and teen driver insurance?
In a word or so, make sure you get your facts straight first. Here’s an inside look at what you’ll need to know:
Focus on college student and teen driver insurance discounts
The good news is, there are car insurance discounts for multi-vehicle households, as well as discounts for good students, says Colleen Benzin, head of insurance products at Elephant Auto Insurance.
“That means when your teen starts driving, it may cost less than you expect to have them safely insured and protected,” Benzin notes. For example, good grades at school can sash auto insurance discounts for kids. “Lowering the cost to insure teenagers can be done, but it takes some planning,” notes Richard Lewis, digital marketing manager at Elephant Auto Insurance.
For starters, some insurers offer discounts for good grades achieved by your college student or teen driver, although you’ll have to ask about it and provide transcripts.”
Buying a new car for a teen driver
"A 'new car' for a teen may be a 1998 Honda Civic, for example, says Benzin. “And while your teenager may be thrilled with that vehicle, it may now be time to add towing and breakdown coverage to your insurance plan,” she says. “This could be an unexpected cost for parents of teenage drivers, but also one that comes with priceless peace of mind."
Emphasize speed limits for a teen driver
Teaching your college student and teen driver to respect the rules of the road is a must, Benzin notes.
“For parents struggling with that, there are smart phone apps that monitor teenage drivers, and alert parents when there's a concern,” she states. “After all, the risk of an accident increases with every one mile per hour increase over the speed limit for teens. Yes, a speeding ticket may cause a hike in your insurance rate but we encourage parents to focus on the bigger costs safety risks involved with speeding. That's why it's crucial to teach teens to obey the speed limit."
Know your auto liability limits
Edward van Eckert, an insurance agent at Farmers Insurance, in Metuchen, New Jersey, says “job one” for parents is to check their liability limits before buying teen auto insurance.
“Because an inexperienced driver is more likely to have an accident, it's more likely that someone may get badly hurt, and lawsuits follow, van Eckert notes. “Many state maximum limits for liability have not kept pace with the inflation of medical and legal costs. It might be in a family's best interest to consider adding an umbrella policy when adding that new driver to the household."
Parents shouldn’t overlook this fact, as van Eckert says that lawsuits often start at a million dollars.
“If the auto insurance policy has a maximum coverage of $500,000 liability that leaves the entire household at risk for having to make up the difference,” he adds.
Talk to your auto insurance company
The Insurance Information Institute reminds parents that insurance companies can help parents get good deals on college student and teen driver insurance, plus keep their kids safe while driving.
“Insurers will subsidize the cost of electronic devices that parents can install in their cars to monitor the way teens drive and by offering discounts to policyholders with teens who use these devices,” the III states in a recent report.
For example, the III points to The American Family Insurance Co., which provides a free DriveCam video camera that alerts parents when a teen driver is driving in a high risk manner.
Or, consider 21st Century’s free GPS alerts parents by email or text message “if their children exceed preset boundaries on speeding, distance or time,” according to III. Also check Progressive’s MyRate program, which offers insurance customers a black box that tracks speed, braking, time of day and distance driven, and can led to good discounts given a safe driving record.
Get the facts on comprehensive teen driver insurance
Make sure to get the facts on comprehensive insurance for teen drivers – it can get you on the fast track to solid coverage and solid discounts.
“Parents should check into comprehensive insurance,” says Bryant Vernon, head of global data sciences & services at Solera, an auto software company that processes seven claims every second. “Comprehensive insurance is an optional coverage with a low or no deductible."
It will not only cover weather related accidents (such as hail), but also covers the family car in case you were hit by an animal (a deer) and usually includes roadside assistance and free gas delivery if you run out, which is great for teens.
Simply put, getting the facts on college student and teen driver insurance takes a thorough, disciplined process. For parents, that means doing your homework, asking the right questions, and knowing when to pounce when you see a good auto insurance deal for your family.