Auto Insurance: Insuring a Teenage Driver

Getting auto insurance for a teenage driver in your home is costly. The increased cost for auto insurance is justified by insurance companies for the simple fact that teenagers are a in higher risk category than everyone else.

Do you know the crash rate per mile driven for 16-19 year-olds is four times the risk for older drivers? This risk drives the cost of your automotible insurance a lot higher.

There are some steps you can take to keep the increased insurance premiums down.

Find the Best Auto Insurance Rates Here

Have your teenager take a defensive driver course if the state you live in doesn’t already require a defensive driver course to obtain a drivers licence.

Add the teenage driver to your auto insurance policy, this is cheaper than having your teenager get their own insurance.

Consider combining your home insurance and auto insurance if you haven’t already. Most insurance companies will give you a discount on your insurance if you have more than one type of insurance coverage.

Shop around for the auto insurance rates. Since you’re adding a teenage driver and maybe another car now is probably a good time to comparison shop for car insurance rates.

Vehicle dealers not last stop for auto insurance

A Mumbai resident who recently bought a midsized car was stumped when the dealer demanded Rs 48,000 premium for the annual comprehensive car insurance. “I did some online research independently and got several quotes from insurance companies, one of which was as low as Rs 25,000. I went back to my dealer who then matched it.’’

In other words, if you plan to buy a car, you don’t have to necessarily pick up motor insurance from the dealer. You could approach insurance companies directly and negotiate a lower premium and secure up to 50% discount on what your dealer offers. According to Delhi-based consumer expert Bejon Misra and former General Insurance Council secretary general K N Bhandari, dealers are known to mark up premium.

While insurance companies TOI spoke to deny knowledge of such a practice, Bhandari says, “Higher the premium, higher the commission. There is a need for consumers to assert themselves even to the regulator to enforce greater surveillance and more stringent implementation of insurance guidelines.’’

Another Mumbai resident who just bought an SUV says, “When people take an LPG connection, they think it is compulsory to pick up a gas stove from the dealer. The same mindset works here.’’ He too managed to bring down the dealer’s quote from Rs 38,000 to Rs 14,000. “The range of quotes is shocking,’’ he says.

Importantly, the dealer did not mention that he was entitled to a no-claims bonus as well, considering he had not made a single insurance claim on his old car. The bonus is transferable across insurers and vehicles-provided you sell your old vehicle.
Says Rahul Aggarwal, CEO at Optima Insurance Brokers, “The bonus is on percentage basis and not in rupee terms. It changes every year. The minimum is 20% on own-damage premium and maximum, 50%.’’ The percentage remains unchanged even when one upgrades from a smaller vehicle to a large one, assures Aggarwal.

An official at the Insurance Regulatory and Development Authority (IRDA), while asking consumers to be more aware, says, “Dealers are neither agents, brokers nor insurers. What they quote is what they get from insurers. They can’t quote more or less than that.’’ Consumers should cross-check the price offered by various insurers, says the official. “Nobody should get carried away. No dealer can force you to get insurance.’’

Budget Measure Requires Drivers Get Auto Insurance

MADISON, Wis. -- A provision requiring drivers to have auto liability insurance was signed into law on Monday as part the state budget.

By July 2010, every driver will be legally required to carry auto insurance. The amount of liability insurance also goes up in January.

Critics say the move will raise rates for everyone, but those who support it say it's a move toward more consumer protection.

"It really is more updating some of the limits you have, what are called financial responsibility limits, that had not been changed in 25 years," said Sean Dilweg, the state insurance commissioner. "And those are being increased two-fold, which really, if you think of medical costs, really falls in line with what people face," said Dilweg.

After July, New Hampshire will be the only state in the country that doesn't require drivers to be insured.