The Truth About Teen Drivers and Insurance

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Dan Browne

Illinois teens who took Driver's Ed last fall will be eligible for their driver's licenses this spring.  Let's take a look at what goes into teen car insurance rates:

Do Teenage Drivers Increase Premiums?

   In most cases, yes. After all, you're extending your coverage to another driver—and not just any driver, but an inexperienced one. Most states—including Illinois—allow insurance companies to use the following factors in pricing coverage for a young driver:

Male or Female:Premiums are driven by statistics. According to the Centers for Disease Control and Prevention (CDC), in 2016 the motor vehicle death rate for male drivers ages 16 to 19 was twice that of their female counterparts.  In other words, young male drivers pose a bigger risk. 

Primary Driver:If your teen has her own vehicle, she'll likely drive it more often than if she were sharing it. Increased driving time can translate to higher rates, as your teen changes from an occasional to a primary operator. 

 Type of vehicle:A car's make and model always impacts insurance rates. If it's a high-end vehicle, expect to pay more—especially for a new driver.

Discounts for Teen Drivers

   Insuring teens can be pricey, so be sure not to overlook opportunities to save. Here are some common discounts for teen car insurance:

Drivers education:Many carriers provide discounts for newly-licensed drivers who've taken driver's ed.

Good student:Most insurance companies provide discounts up to 20 percent for students with at least a B average. This may need to be verified each year, so be sure to keep a copy of report cards handy.

Electronic monitoring: Some insurance companies offer discounts for adhering to safe driving habits as verified by an electronic monitoring device that plugs into your car's diagnostic port. In most cases, monitoring only lasts for a specified period, and parents have access to the data collected.

Away at school without a car: If your young driver attends a boarding school or college more than 100 miles away, be sure to tell your insurance company. There is typically a large credit for this while still providing coverage when she's home.

What If I Don't Tell My Insurance Company About My Teen Driver?

   This has become something of a hot-button issue lately—with many parents opting to not claim their teen drivers in order to save a few bucks.  We've even heard stories of other insurance agents "advising" parents that their teen drivers don't need to be insured.  I cannot stress enough how risky—and potentially financially-devastating—this practice could be.  Let's examine why...

   In the best case scenario, if your uninsured teen causes an accident, the insurance company may decide to cover the claim. However, it may also charge you for back premium, billing you for the extra cost of insuring your teen, dating back to when his license was first issued. This could be significant, depending on how much time has passed.

   Even if the carrier agrees to cover the claim, it may only do so according to the minimum liability limits of your state. This scenario could leave you severely under-insured, and you may have to pay for some of the costs out of your own pocket.

   In the worst case scenario, the carrier could deny the claim entirely, leaving you responsible for all damages. That includes damage to all vehicles and property involved, bodily injury, pain and suffering, and loss of income. Is this something you're willing to risk with an inexperienced driver?

   With careful consideration of your insurance needs, you can enjoy this time as the rite-of-passage it is. Stay safe and contact Forest Agency with all of your insurance questions!

Dan Browne is the President of Forest Agency Insurance, a proudly independent insurance agency serving Oak Park and the surrounding communities since 1957.

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