Slideshare - Teen Car Insurance Strategies

Teen Car Insurance Strategies

Notes:

The number one way to get your kids to drive safe when they are older, is for your to drive safe now. No more running "pink lights" rolling through stop signs, cutting people off. Kids learn what they see, not what we tell them.

If you want to skip my BS, and read the summary, jump to the bottom of the teen strategies summary.

Hopefully you have read the first part of the two part series, UNinsure your teen. If your teen is under 18,that is must reading. Buying a teen car insurance without higher limits is a good buy. Goodbye house, goodbye retirement, goodbye savings.

If your teen has already started collecting tickets or accidents, your insurer will probably take them off your policy or cancel yours. it's a good time to get your teen into the high risk pool. In these parts, it's called California Automobile Assigned Risk Plan (CAARP). The high risk program differs from the California Low Cost Automobile Insurance Program (CLA).

Some companies offer usage based tracking, which is esp. good for teen drivers. But the results are sent to the insurer. None that I know offer actual locations, or where your teen is driving. Only hard braking, miles driven and top speeds. reward "safe" drivers, giving them lower premiums.

Drawbacks of auto insurance tracking are they cannot know the dif. between highway, city, or dirt road driving. Also the insurer might charge higher rates to someone who speeds only, and charges less for a slower driver who talks on their cell phone, changes lanes, does makeup on the road. In short. the GPS tracking cannot predict future accidents, only charge you for the safe driving on the past.

Pay by the mile can be excellent for teens because they typically don't drive very far. To school, to work, all of which are usually very local. Problem is few companies offer it at this time in California.

State Minimums for a teen is usually a bad idea, unless your finances are really tight. Un least, get uninsured motorist with the minimums. It's very cheap to get more than the state minimums. Most teen car accidents are caused by speed (30%).

At the risking of having your policy canceled, you can add your teen, but strongly consider having them pay for it. Why? Because tickets, accidents, etc. will increase YOUR rates and they need consequences. You may have one of those teens that drives perfectly, listens well, gets good grades, my hat is off to you. But that may be the exception, not the rule. And you are 1 careless street race away from having your policy canceled.

If your car insurance policy is canceled, you will lose your loyalty discount, which in California is 20% after 3 years of safe driving. The good news is you can get another policy, shop around and if might now work out to bad if you were overpaying in the first place. But the new insurer is going to want to get the teen off your policy. You will probably have to sign a driver exclusion form, so the insurer does not have to cover the teen driver, should they get into an accident. And if you sign the form and allow them to continue driving, you're be responsible.

The California Department of Insurance has a great survey tool that I highly recommend. The online surveys the carriers fill out do give you a ballpark idea of the cost. But they do not cover your specific teen, only an average driver. One carrier had my teen at over $5,000 per year! It's not so much who to use, but who not to use.

If your teen gets good grades(B+ or higher), that certainly helps out, cause most insurers will give you a small discount, around 10%. The drivers training course is a must, the more experience you can get a teen, the better. But a lot of teen speeding (the #1 cause of teen accidents), has more to do with personality, no so easy to change.

A great way of keep your teen's speed down is with a governor or speed limiter. I have not explored this area, but you could reduce their top speed and reduce the #1 cause of teen crashes. However, unless your really get fancy and start using GPS to calculate legal speed limits, you'd only be able to limit the teens speed to say 70. Which would reduce teen speeding on the highway but really do nothing for city speeding.

Without getting into expensive technology, you can always buy your teen (better if they buy it) a beater that won't go over 70 mph. You won't get performance type handling with an old, worn out car.

The average consumer only gets 3 quotes when shopping for auto insurance. Way to few. Shopping doesn't cost you, except in time, but it;s time well spent, can you can find some good deals out there.

If your teen is going to a far away school, don't let him take the car. That way you can suspend the car insurance on that car.

Make sure your California teen obeys the license limit laws or he won't be able to turn a provisional to a full drivers license until they are 18 (at least).

If disregard everything you read up to this point and are still crazy enough to add the teen to your policy, make sure your insurer will split your limits. In other words, comprehensive coverage on your newer, nicer car, and liability on your teens beater. It makes little sense to pay for comprehensive on an older car. And give your teen a higher deductible while you are at it, to lower the premium. And your teen can pay the deductible should they wreak.

Teen Strategies Summary:

• Get many quotes from many carriers (zip code box at the top);
• Use insurer tracking to get a discount for your teen;
• Have your teen take a drivers safety or training course
• Increase and split limits on different cars; and
• Notify the car insurance company that you have an excellent student.

Don't forget the 1st half of the presentation, UNinsuring your teen driver.

Written by Craig J. Casey

Financial Writer helping people with their insurance problems on the net since 1998.

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