When parents of a teen first watch their baby take the wheel,
they may be too busy seeing the years flash before their eyes to
focus on insurance for the family's newest driver. Putting a new
teen driver on the road can be scary -- and expensive.
"Aside from the insurance aspects, parents need to appreciate
their role as the risk manager for their teens who drive," says
Greg Serio, managing director at Park Strategies LLC, who is also
a former insurance commissioner of New York.
Limiting a teen's hours of operation, restricting the number
of riders in a car, and prohibiting the use of cell phones or
texting devices (which can be double-checked through the cell
service bills) are all ways a parent can prevent or mitigate
Adding a teen driver to an auto insurance policy
Some auto insurance companies will want you to add your teen
when he gets his learner's permit; others will wait until he has
his license. It's important to call your agent to check.
Ray Crisci, senior vice president and worldwide automobile
manager for Chubb Personal Insurance, warns parents that they may
not be covered if their teen gets in an accident before they have
been officially added to the policy.
"My best advice is to call your agent or insurance provider
when it's time to add a teen driver to your auto insurance
policy. This is important because some insurers (but not Chubb)
have a drop-down provision in their policies that limits coverage
for operators that are not listed on the policy," says Crisci.
"You should tell your insurance agent as soon as your teenager
gets his/her permit."
Now down to the nitty gritty -- choosing coverage.
Corrin S. Trowbridge, owner and broker at San Francisco-based
Farmers-Trowbridge Insurance, who has helped many parents add
teens to their policies, says that parents need to think big when
deciding how much coverage to buy.
Trowbridge explains that families with teenage drivers need
high liability limits because teens are among the riskiest
drivers on the road, and if they cause an accident, the injured
party can come after the parents' assets. You're not buying
higher limits for your teen's assets-you're buying the higher
limits for your own protection.
He notes that if parents raise their coverage levels
raise their deductibles, they may not add to their overall
premium cost. The deductible is the amount you must pay out of
pocket if you have a collision or comprehensive claim. When you
raise your deductible, your premium goes down.
Insurance costs for a teenage driver
Many parents are already operating on tight budgets. The
initial cost to add a newly licensed teen driver can be as much
as three or four times what an adult driver would pay, says
The high premiums reflect grim statistics: Drivers ages 16 to
19 are three times more likely than drivers age 20 and older to
be in a fatal crash, according to the Centers for Disease Control
Their chance for car crash injury is significantly out of
proportion. Drivers age 15 to 24 make up 14 percent of the U.S.
population but account for 30 percent of the costs of motor
vehicle injuries among males and 28 percent of the costs among
"The cost will generally steadily decrease as the teen driver
ages, gaining additional driving experience and maturity," says
Squeaking out auto insurance savings
Causes of teen car crashes
The CDC has identified these eight "danger zones" as
the leading causes of teen car crashes.
#1 Driver inexperience
#2 Driving with teen passengers
#3 Nighttime driving
#4 Not using seat belts
#5 Distracted driving
#6 Drowsy driving
#7 Reckless driving
#8 Impaired driving
Ask your agent to review discounts you, and your teen, might
be eligible for, such as a loyalty discount, accident-free
discount, good student discount and occasional operator
discount if your teen goes away to school some part of the
Crisci says parents usually have to take the initiative to
find out what the discounts are in order to take advantage of
Discounts vary considerably by type and amount among insurers.
Insure.com has a tool to help you identify
car insurance discounts
available in your state.
Trowbridge also advises parents to add their teen to the
policy on the family's oldest car.
"They should still be able to drive any car in the household,
but you want to have them rated driver on the least expensive car
in order to save money," says Trowbridge.
Amy Bach, executive director at United Policyholders, a
consumer advocacy group, also advises parents to check with their
insurance company to see if it is cheaper to have a separate
policy for your teenager or to add him or her to your policy.
"A parent's own driving record impacts their auto insurance
costs, so comparison shopping to insure your teen should include
looking into buying a separate policy for the teen versus adding
them to your policy. And especially if your current car insurer
isn't giving you a loyalty discount, you can switch the family
(or you and your teen) to a different insurer -- if you find one
offering quality coverage at an affordable rate," says Bach.
If you're buying a vehicle for your teen, picking the safest
vehicle possible is also a must.
"If the teen driver will be getting a vehicle, it's best to
pick one that has the latest safety features, including stability
control, which has been proven to reduce single-car accidents.
Parents should focus on cars that are big, slow and safe,"
Chubb has teamed with the Insurance Institute for Highway
Safety to offer a video about
Young Drivers: The High Risk Years
Setting rules is important. The CDC offers a
parent-teen driving agreement
originally appeared on insure.com.
Bank of America + Apple? This device makes it possible.
Apple recently recruited a secret-development "dream team" to
guarantee its newest smart device was kept hidden from the
public for as long as possible. But
the secret is out
, and some early viewers are claiming its destined to
change everything from banking to health care. In
fact, ABI Research predicts 485 million of this type
of device will be sold per year. But one small company
makes Apple's gadget possible. And its stock price
has nearly unlimited room to run for early in-the-know
investors. To be one of them, and see Apple's newest smart
You may also enjoy these insurance-related articles:
Finding the Best Car Insurance for Teens
originally appeared on Fool.com.
Try any of our Foolish newsletter services
free for 30 days
. We Fools may not all hold the same opinions, but we all believe
considering a diverse range of insights
makes us better investors. The Motley Fool has a
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights
reserved. The Motley Fool has a