An Anxious Milestone

By Insurance Center of New England

It is certainly not inexpensive to get car insurance coverage for a new teen driver.

When a teen driver is added to their parent's policy, the typical insurance premium for a one-car family is likely to increase by 40% to 50%. If you're a multi-car family, you will probably see your insurance rates go up even higher. And if you're opting to reward your new driver with a car, and expecting them to secure their own insurance policy, you should prepare yourself - or your teen - to pay at least a couple thousand dollars in car-insurance costs.

So, we understand why parents might want to hold off on getting auto insurance for their teen driver until absolutely necessary. However, even if you think your teen will only occasionally be borrowing the family car, the fact is they are now a licensed household member. As such, if you do not add them to your current policy as a covered driver, you risk being denied by your insurance carrier for any future claims, having your coverage terminated, or both. In addition, should you decide that you want to shop around for a better car-insurance rate, you will also need to make sure your teen driver is listed on all of your insurance applications so that you get an accurate quote and adequate coverage.

At the Insurance Center of New England (ICNE), some of the strategies for saving money that we discuss with our clients include:

* Take advantage of discounts such as good student, which rewards teens with a grade point average of B or higher. If your student is eligible for this discount, it may save you hundreds of dollars on your car-insurance premium.

* Completing defensive-driving courses can earn you and your teen significant monetary credits towards your policy premium. Even more, your teen will hopefully drive away from this course with a better understanding of how to keep safe behind the wheel. Since even minor fender-benders can drive up your insurance costs, it's critical that your teen - as well as all other family members listed on your policy- do their best to keep their driving record clean of any accidents and moving violations.

* Investing in accident forgiveness can limit the financial impact in the event your teen does get in a car accident. Since 16-year-olds have higher crash rates than drivers of any other age, we recommend that our clients with teens strongly consider this endorsement, which can cancel out the surcharge points that are typically assessed by your insurer after an accident.

* Sharing a vehicle with your teen rather than giving them their own vehicle may allow you to classify your youngster as an 'occasional driver' rather than the primary driver, which is another excellent way to keep your insurance rate lower. If you decide, however, that your teen will need a car of their own, it may make financial sense and keep your insurance costs down to assign them as the primary driver of the family vehicle that is the least expensive. Are you adding a vehicle to your household for your teen to drive? Look for a car with safety elements, such as anti-lock brakes, air bags, and anti-theft devices, as insurers will often reward you for having these features with lower car-insurance rates.

* Monitoring your teen driver with today's technology can not only help you keep an eye on your teen when they are on the road, but also earn you discounts on your car-insurance premium. Some insurers are now offering devices to parents that can be installed under a car's dashboard and that create a report card of your teen's driving behavior. Information may include the number of miles the car covers, how fast your teen is driving, the hours the car is on the road, and how often your teen slams the brakes. Insurers with this program are providing discounts ranging from 15% to 30% to drivers who achieve pre-determined safe-driving benchmarks.

* Raising your deductibles can lower your premiums. However, this is a smart choice only if you are comfortable knowing you might end up having to pay a larger share of costs for an accident out of your own pocket.

The team at ICNE has helped thousands of families across New England adapt to having a teen driver in their home. We know that your child's newfound independence is exciting, but may also cause you some stress and anxiety. As your insurance partner, we want you to know we will not only focus on finding you competitive rates for the newest driver in your household, but we will also make sure that your coverage provides the optimal protection for your family's increased insurance needs. ♦