Make Sure You and Your Teen Are Properly Insured
INSURANCE INFORMATION INSTITUTE
Contact: Press Offices
New York: 212-346-5500; media@iii.org
Washington, D.C.: 202-833-1580
NEW YORK, July 1, 2008 - Summer months mean teen drivers are out of school, on the road and behind the wheel more frequently, which can be a strain on the fortitude as well as the finances of their parents. Families with teen drivers should educate them about driving safely and make sure they and their teen are properly insured, according to the Insurance Information Institute (I.I.I.).
The odds of a teenage driver having an accident are high. According to SADD (Students Against Destructive Decisions) research, teens spend 44 percent more hours driving each week in the summer than during the school year. Furthermore, 16-year-olds have higher crash rates than drivers of any other age. Motor vehicle crashes are the leading cause of death among 15- to 20-year olds. According to the U.S. Department of Transportation, 3,490 drivers in this age group died in motor vehicle crashes in 2006 and an additional 272,000 were injured. In the same year, drivers aged 15 to 20 accounted for 12.9 percent of all drivers involved in fatal crashes and 16 percent of all drivers involved in police-reported crashes.
"Teens think they are indestructible and often engage in risk-taking behavior," said Loretta Worters, vice president of the I.I.I. "They are distracted by things they shouldn't do in a car like eating, talking on their cell phones, text messaging, talking to friends in the car-and they often don't wear their seatbelts."
Protection for your teen
The Insurance Information Institute recommends taking the following steps to ensure the safety of your teen:
- Pick a safe car.
The type of car a young person drives can dramatically affect the price of insurance. You and your teenager should choose a car that is easy to drive and would offer protection in the event of a crash. You should avoid small cars and those with high performance images that might encourage speed and recklessness. Trucks and SUVs should also be avoided, since they are more prone to rollovers. For more information, see Teenagers and Safe Cars.
- Have your teen take a driver's education course.
A teen who has learned to drive though a driver's education course is viewed more favorably by insurers than a teen who has been taught by his or her parents. Indeed in some states, teens must take a driver's education course if they want to get a license at age 16; otherwise, they have to wait until they are 18. Learning to driving safely will not only keep your son or daughter alive and healthy, it can also save you money. Driver's education courses can be good for discounts of up to 15 percent. But before signing up, check to make sure the course you have in mind is approved by your insurer.
- Enroll your teen in safe driver programs.
Some insurers offer "safe driver" programs. Teen participants in these programs sign contracts stating that they will not, for instance, drink and drive. Check whether your insurance company has such a program-if your teenager completes the program, you may be eligible for a discount. In addition, some insurers now offer discounts for parents and teens who install tracking devices in the car. Parents can monitor their children's driving with a small global-positioning device fastened to the dashboard. A Web site lets parents set limits on their children's driving; for example, if the car goes over a certain speed, or ventures too far from home or school, the parents will automatically receive a message.
- Talk to your teen about the dangers of combining driving with alcohol, drugs, lack of sleep and distractions.
Teach your children about the dangers of drinking and driving, and other distractions. Accidents occur each year because a teen driver was drinking, using a cell phone, text messaging, playing the radio or talking to friends in the backseat. Also, teens should be careful not to create distractions and to exhibit safe behavior when they are passengers in their friends' cars.
- Be a good role model.
New drivers learn by example, so if you drive recklessly, your teenage driver may imitate you. Always wear your seatbelt and never drink and drive.
- Graduated drivers license programs.
New drivers are restricted from certain activities, such as driving with passengers, until they have had their licenses for a set period, such as six months. A number of states have reduced teen accidents by restricting the amount of time new drivers may be on the road without supervision. If you live in one of these states, ask if any discounts are available. If your state does not have such a program, you can still institute this same policy with your own children.
Protection for you
You can protect yourself financially while keeping the increased cost of adding a teen to your insurance to a minimum by doing the following:
- Insure your son or daughter on your own policy.
It is generally cheaper to add your teenagers to your insurance policy than for them to purchase their own. If they are going to be driving their own car, insure it with your company so that you can get a multi-policy discount.
- Find out how your insurer assigns drivers to cars. Some insurers will assign the driver who is the most expensive to insure (generally the teenager) to the car that is the most expensive to insure. If possible, assign your teen to the least valuable car. Some insurers will allow consumers to do this if the number of automobiles equals or exceeds the number of insured drivers on a policy. With this kind of arrangement there can be no exceptions; your teen must use only the car to which he or she is assigned, even in an emergency. Otherwise if your teen is involved in an accident with an unassigned car, there could be penalties imposed and an increase in your premiums.
- Increase your liability insurance. State minimums for liability insurance will probably not be enough to fully protect you from lawsuits, should your teen get into an accident. Many vehicles today are worth more than $15,000 and medical bills for injuries could easily exceed $20,000 for one person. If your teen is found negligent in an accident and the damages exceed your insurance limits, you will be financially responsible and can be sued in court for those amounts not covered by your insurance.
- Raise your deductible. Going from a $250 to $500 or $1,000 deductible can save you 10 percent to 20 percent on your premium. You can use that savings to increase your liability insurance.
- Let your insurer know if your teenager is going away to school.
You may be eligible for lower premiums once your teen heads to college, providing he or she leaves the car behind. Many insurers will reduce rates for students attending a school at least 100 miles away from home and who do not have a car on campus.
- Encourage your teen to get good grades and to take a driver training course.
Most companies will give discounts for getting at least a "B" average in school and for taking a recognized driver training course.
- Shop around.
Insurance companies differ dramatically in how they price policies for young drivers.
"Contact your insurance agent when your teen is about to get his or her learner's permit," said Worters. "Your agent will explain the costs involved in insuring a teen driver. The good news is, as your teenager gets older, insurance rates will drop-providing he or she has a good driving record."
For more information about insurance, go to the I.I.I. Web site.
For related audio, go to More Accidents Take Place When Teens Are Out of School; Make Sure You and Your Teen are Properly Insured.
The I.I.I. is a nonprofit, communications organization supported by the insurance industry.