Insurance Guidelines for New Drivers
Now that you are old enough to drive, your parents have undoubtedly talked to you about the dangers of driving, stressed the importance of seat belts, and at some point have raised their voices during the course of your driving instruction.
However, they have probably mentioned very little to you about insurance, aside from the fact that they cannot afford to add you to the policy. “It is too expensive,” they say. “If you want to drive, you will have to pay the premium.”
We will discuss some of the reasons for your parents’ concerns, cost patterns, auto damageability comparisons, actual tables, and more. Being in the insurance business, we have access to resource materials that many people do not.
Consequently, accidents, claims, etc, raise claims. Large lawsuits can raise everyone’s premiums.
New Drivers Are A Serious Risk to Insurance Companies
Though they may know you personally, as a new driver in general, you are a serious risk to their company. Insurers are “numbers people” who use formulas to analyze miles driven, average damage costs, and so forth. Ultimately, these result in premiums that are not unfairly discriminatory.
Statistics show that out of the total driving population, those drivers under 25 years of age total 14%, but account for 27% of all accidents, and 26% of auto fatalities. This is disproportionate. The bottm line is young drivers have more than their share of claims, resulting in higher premiums for youthful drivers.
Premium Discounts for Driver Training and Good Grades
You will start out at higher premiums but can get a discount two ways. First, you can receive the good student discount with a grade point average of B or higher, which will save more premium than driver training. Some insurance companies will let you have BOTH, offering something such as 10% + 5% = 15% off.
Accidents Affect Insurance for the Entire Family
If you have an accident that is your fault, it affects the entire family. Most insurance companies will raise the rates 40% for one fault accident, 90% for two fault accidents, and cancel on the third. This actually cancels the family. It was not always this way. An attorney successfully sued an insurance company with named driver exclusion; therefore, the entire family now suffers.
Tickets Can Jeopardize Insurance Coverage
It may not be fair, but young drivers are more likely to get a ticket for a minor violation than their parents are. Cops look harder at young drivers. If you get two or more tickets, your insurance policy may be cancelled. Similar to accidents, some insurance companies charge additional premiums for tickets.
DWI Citation = Insurance Cancellation
Never drink and drive. The result of a DWI is an immediate cancellation. Non-standard, high-risk insurance premiums of low limit liability coverage only cost $4,500 per year. Like car accidents, a DWI can affect your family’s insurance.
Money Saving Ideas for New Drivers