The most-often-asked questions of insurance agents from young drivers and their parents are: “Why are the rates for teen drivers higher?” and “How can I pay less for insurance?”
The answer to the first question is because teens generally have more frequent and more expensive auto insurance claims than any other age group.
According to the Insurance Information Institute, adding a child to your policy can cause your auto insurance to go up anywhere from 50 percent to 100 percent.
To make it fair for everyone, insurance companies charge higher rates to groups, which on average have more claims, and lower rates to people who generally have fewer claims.
The answer to the second question is many ways!
The easiest way for a young driver to lower the cost of insurance is to develop a good driving record and be responsible by following traffic laws, avoiding traffic citations and driving defensively.
A record of citations and accidents will lead to higher insurance premiums or result in a teen being assigned to a company that insures only substandard drivers.
It also pays (sometimes hundreds of dollars) to get good grades.
Some insurance companies offer good student discounts. This discount is offered because studies have proven that students with a “B” or higher grade average are more responsible when they drive, which means they have fewer claims.
Parents, too, can help their teens keep insurance premiums lower by setting a good example. If parents obey driving laws, wear seat belts, avoid or minimize talking on cellphones and observe speed limits, teens will do the same.
The more time a parent spends with a teen behind the wheel, the better driver the teen will be. When driving with a teen, parents should be firm and fair in criticizing bad actions, but also commend a good job. Most of all, parents should have confidence in their teen’s driving and keep “cool” no matter what.
In addition, evaluating insurance needs can lower costs. Determine if there is a need to carry comprehensive and collision insurance, especially on older cars; consider a higher deductible; and keep adequate automobile liability insurance.
• COUNTRY Financial Representative Marcia Kennedy, whose office is located at 1640 S. Stapley Drive in Mesa, may be reached at (480) 325-1521, ext. 232.