Teen driver alert! Parents probably know what's coming: Insurance premiums go through the sunroof when adding a young driver to the family's auto coverage.
In Connecticut, a married couple's auto premium will increase 79.61 percent when adding a young driver, according to a new report by InsuranceQuotes.com. In actual dollars, the average increase in the state is $2,149.17.
"A typical [Connecticut] consumer is paying $2,700 without a teen, then boom," says Laura Adams, senior analyst at InsuranceQuotes.com. "They add a teen and they're up to $4,850 to have those two cars and three drivers on the policy."
You'd be better off in Hawaii (as if you didn't know already), where premiums increase only 18 percent when adding a teen driver. Rate increases fluctuate that dramatically, in part, because of state regulations. In Hawaii, for instance, insurers cannot use age, gender or driving experience as factors in auto rates.
"When you remove those factors," says Adams, "it doesn't cost much more to add a teen than it does to add an additional adult driver to a policy. State regulations are huge. "
Connecticut state law allows insurers to factor into their rates age, sex, marital status, vehicle type (and model year), usage, mileage, the number of cars, driving history and credit history. Insurers cannot use credit to shape rates in California and New York. In other states, including Connecticut, a bad credit history usually means a higher premium.
Where you live ? specifically the ZIP code -- also affects premium rates as insurers look at traffic patterns, accident rates and claim rates.
"If you live in a Manhattan ZIP code," says Adams, "you're going to be paying a heck of a lot more than if you were living in an upstate New York ZIP code."
Connecticut law, in fact, prevents insurers from splitting a town or city into two rating "territories."
Robert Hunter, director of insurance for the Consumer Federation of America advocacy group and former Texas insurance commissioner, says where you live ? and what happens where you live ? affects premium rates even more than state regulations.
"[The rates] vary for the same reasons adult drivers rates vary," he says. "Traffic density is critical to the rate in a certain place (city or state), law enforcement effectiveness, income level, being the prime differences. "
Despite Connecticut's close-to-80-percent increase when adding a teen driver, only 13 states showed smaller increases in the report. Arkansas (with a survey-high of 116.34 percent), Maine (with a 105.23 percent increase) and New Hampshire (100.56 percent) were among 10 states where premiums at least doubled.
The younger the teen driver, the higher the premium. Increases nationwide averaged 99 percent for adding a 16-year-old, with rates progressively lower for 17-year-olds (90 percent), 18-year-olds (82 percent) and 19-year-olds (65 percent). Gender matters, too. Adding a teenage male increased a married couple's premium 96 percent, far more than adding a female (72 percent).
The InsuranceQuotes.com report, compiled by Quadrant Information Services, was based on rates from the largest carriers in each state. The baseline: a married and employed 45-year-old man and woman with policy limits of $100,000 for injury liability for one person, $300,000 for all injuries and a $500 deductible on collision and comprehensive coverage. Premium estimates used two cars, each driven 12,000 miles a year, from the following 2012 models: Toyota Camry, Honda CRV, Honda Civic, Ford F150 and Toyota Prius.
So how do you beat those high-percentage increases?
>> Good-student discount. Maintaining a "B" average or better and getting on a dean's list or honor roll could reduce the parents' increase by as much as 25 percent, says Adams.
"That's substantial," she says. "In most cases, the good-student discount applies to age 16 all the way up to 24. . . . It gives parents a nice incentive to make sure the kids are doing homework."
>> Defensive-driving class. "In many cases," says Adams, "high schools will offer safe driving courses for teens. If they don't, you can go online. Many companies offer these courses. I've seen them as low as $8. Typically, they're about $25. The kid doesn't have to get behind the wheel. It's theory, concept and understanding the rules and laws for safe driving in your state."
Passing the course could create a premium discount of 5 percent to 10 percent discount for three years.
>> Shop around. Get several quotes every year because rates for teens lower each year they age.
>> Loyalty discount. Staying with the same insurer for several years can result in rate discounts from 20 percent to 30 percent.
>> Multiple policies with an insurer. Buying both homeowners and auto coverage from the same insurer often results in a discounts on both.
>> If you're buying your teen a car, make it an older, safer model like an SUV, a family sedan or midsize car. A new car has the latest safety features, which insurers like, but coverage is usually more expensive. An older, low-cost car also might not need collision coverage, resulting in a lower premium.
"The bottom line," Adams told The Bottom Line, "is parents need to think about the car they're allowing that teen to drive because the car itself plays a big factor in the rate you'll pay."
rod stewart derrick rose nate robinson lena horne klay thompson kate upton the great gatsby
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.