Buying Car Insurance for Your Teen Driver
When our first son started to drive five years ago we just called up our agent and told them to add him to our policy. He had his own little car and it was completely paid off. Even though he had his own vehicle, he was listed as the primary driver on our most expensive vehicle to insure- and it wasn’t his. When he dodged a deer and ended up upside-down in a ditch, our rates went through the roof, because he was listed on our more expensive vehicle with full coverage. Because the car was older and paid for, it only had liability coverage on it; they didn’t have to pay out anything, but it didn’t matter. He was given a citation for losing control of his car. He replaced it with an even less expensive and much older car that someone on a cell phone rear-ended while he was waiting to turn- not three months after he had bought it; back to the old yellow limousine to get to school. Up went our rates again (although slightly this time) even though it was clearly the other guy at fault. In his excitement at getting a nice little truck (and his first loan) he went a tad over the speed limit. You guessed it-up went my rates-this time on his truck because more was owed on it than my car and being a minor, I had to co-sign the note. He lived at our residence, so we could not get him on a separate policy. I love my son dearly, but I have to say I was glad to see him go off to college and off of my policy.
Now I have another son ready for the big leap. He has a totally different driving style-slow and meticulous. However what I learned from the first time was to not just accept that he has to be insured as the primary driver on the most expensive vehicle we own. I was told by my agent that it was just the way things are done and I had no choice. We already have the car completely paid off, therefore liability only will be applied, and he isn’t licensed yet. Do your homework. My agent led me to believe that it was the industry standard and possibly some sort of law, though he didn’t come right out and say it was a law, he just insinuated it was. I checked and it isn’t. It isn’t against the law either even though you are definitely getting ripped off.
I have begun the lengthy task of gathering information on different insurance companies to ask if they follow the precept of insuring the new driver to the most expensive vehicle. Now I must say, if you go online, they won’t give you an answer unless you call for a quote. They will not answer any questions that don’t pertain to, “How much is it to insure these cars?” and gather all of your information for a quote. However, when I called the number for the quotes, I didn’t ask for a quote. I asked questions on their practices and told them I’d get back in touch on the quotes. They will answer your questions, but won’t promise anything. They can’t unless they want to get fired for promising something to someone and then they find out that they are extremely high risk and there they are stuck with the promise they gave over the phone.
I found out a number of interesting facts from both local and nationally recognized insurance companies and consumer information sites.
One: It is not standard practice to put your new driver on a vehicle that they don’t drive as long as you have as many vehicles as you have drivers. If you only have two vehicles, but you have three drivers, then they are probably going to insure your teen on your most expensive vehicle just because they can, and you can’t guarantee that the kid won’t be driving it. It doesn’t make sense considering they probably will drive anything you own at some point anyway, but they are covered to occasionally drive those vehicles if you have a vehicle for each driver. Only one car and three drivers? All three of you will be covered, but your youthful driver WILL be listed as the primary. It’s a way they make extra money and you are truly caught over a barrel, as the saying goes.
Two: Insurance companies will be looking at your credit score. I’ll bet you thought it was only used to obtain a loan. Not so. If your score is low enough, while discouraged, they can deny you coverage all together or put you in an obscenely high rated risk category. They have to tell you if your rate was adversely affected because of your credit score just like if you were trying to get a loan and were turned down. You are entitled to a free report from the reporting agency; you should check it in case of errors. If there aren’t any errors, then there isn’t much you can do except try to try to improve that score by keeping payments on time every month and getting things paid off as soon as you can. To whom you owe is also a considering factor. Stay away from pay-day loan agencies and car-title loan agencies. It really does affect your credit score.
Three: Ask what discounts you are entitled to. Your agent is supposed to automatically look into that for you, but if you are dealing with someone online or by phone, they might not (as an oversight-hopefully) look for all the discounts. They should have them automatically built into the website but if your child gets excellent grades, ask if you can get a discount for that if it doesn’t already show up on the declaration page. Insurance companies equate students with good grades with attentive, good drivers. You most likely won’t be able to get your young driver insured by themselves on their own policy-I asked and it isn’t done if they are under age or living at home, so you will have to insure all of your vehicles together. You are therefore entitled to a multi-car discount. Tell them what safety equipment is installed on your vehicles, such as anti-lock brakes, air bags, and automatic seat belts. You can get a dandy discount if your car belts you in automatically! See if you can realistically (economically) insure everything- household, recreational vehicles, vehicles, life insurance (any combination of them or all of them) and you can be eligible for even better discounts.
Four: Ask your agent to periodically check your policy for anything that might make you eligible for a new discount. A safe driving record for everyone insured is a big plus. No accidents where you (anyone on your policy) are at fault and they have to pay out for three years helps to lower your rates. If your youth is no longer living with you, you will definitely lower your rate, unless they are in college (or the equivalent) and are still considered part of your household. If you are covering them on your policy, then you can’t deduct them, obviously, but you might be able to get them their own policy. It won’t help their rates since they won’t get the multi-car discount, but it will help yours. If they get caught with speeding tickets, accidents, or the infamous college behavior of drinking underage (driving or not) it will really affect your insurance unless they are on their own policy; theirs will be adversely affected. If they are driving during or after drinking, they could lose their insurance altogether. If this happens, check with your state to see if there is a state sponsored auto insurance for those who can’t get it elsewhere. Wisconsin has such a program. It isn’t cheap, but it’s way better than getting caught without any insurance. If they get caught in an accident or get a alcohol related ticket and aren’t insured, their license and their license plates can be taken away by the state. But, we teach our young drivers to be responsible drivers; right?
Five: Believe it or not, if the car your youth drives is theirs, as opposed to driving Mom’s car they can get a lower rate; so ask. Put it in their name, even if you have to have it listed to you and them, it is in their name. Most insurance companies don’t want to insure a car on your policy that isn’t in your name, but if he or she goes off to school and you are still covering their insurance on a separate policy, get the car put into their name. They consider them to be more responsible for their own cars.
In summary; always do your research. Check the viability of the company, the reputation of the company, and the rates. The lowest rates will not always be the better deal if they have a really bad record about paying out on claims. That is why you have insurance after all, in case of an accident. If your agent can’t be reached most of the time, you should be seeking insurance elsewhere, because they are not going to be working for you to get you the best deals. They are checking you out; shouldn’t you be checking them out just as closely?
Here is a handy list of some of the better known insurance companies and how to reach them. You should check with your state’s Insurance Commissioner’s office for questions specific to your state’s insurance laws.
Geico Insurance: www.geico.com or 1-877-206-0215
All State Insurance: www.allstate.com or 1-866-232-9327
Travelers Insurance: www.travelers.com or 1-800-842-4701
State Farm Insurance: www.statefarm.com or1-800-616-3730
Progressive Direct Insurance: www.progressive.com or 1-800-776-4737
American Family Insurance: www.amfam.com or 1-608-249-2111
You can of course always contact your local agent for most of these companies.
