FACT: Putting a newly licensed youthful driver on your automobile policy can more than double the cost of your auto insurance.

We won’t debate the fairness of this fact or argue the validity of statistics that say that kids are involved in more accidents than other drivers. Let’s focus on the things you can do something about.

FIRST: Each state has different restrictions on how companies charge for automobile insurance. In some states it doesn’t matter how old you are, just that you haven’t been driving long. Most states allow companies to charge more for male youthful operators. Many states also allow companies to cancel auto policies after only one youthful operator accident or violation. A few states, e.g. Massachusetts, set the rates rules and forms and there are fewer options or ways to reduce cost. Talk with your agent about the rules in your state. Your agent will often have excellent ideas on how you can cut costs.

What are some of the definite things you can do to reduce insurance costs and keep your kids safe from auto insurance accidents?

• Review and make sure your new driver understands and signs the Youthful Operator Driver Safety Agreement
• Enroll your child in driver training. Driver training can be expensive, but you will save hundreds of dollars in insurance cost each year.
• Many companies give significant premium discounts for good students. Generally, a good student has a B or better average (average of all courses on a five-point scale. A = 5. B+ or A- = 4.5, etc.) on the last report card.
• But – don’t rely completely on the driving schools. Test your child in regard to passing, parallel parking, looking all ways when making a turn, Y or U-turns, speed, traffic law understanding, general attitude and respect for the power of the automobile. Don’t convert the learners permit into a license until your teen passes YOUR driving test. Even after your child is licensed, test your child’s abilities in rain and snow before you permit the child to drive alone in adverse weather. In the wrong hands, cars are lethal weapons.
• Find an insurance company that will rate your new driver on the car the teenager actually drives most of the time. Some companies will assign the most expensive driver the highest rated vehicle. You don’t want your teenager charged to Dad’s new Cadillac, when all your child drives is the older Accord.
• Do you really want your child driving to school each day? Driving to school for many companies is the equivalent of driving to work. The longer the drive, the greater the premium charge.
• Finding the correct company for your youthful driver doesn’t begin when that child decides he or she wants a learners permit; it begins years before. Youthful operators have quick reflexes, but don’t have the experience you or I have. They may not recognize that the driver at the intersection ahead may not stop. Police are less likely to give the youthful operator the benefit of the doubt in marginal speeding situations. So what? Many insurance companies will forgive the first accident, and permit more minor traffic violations the longer you are insured with the company. Find out when your child is 13 or 14 — do I have a company that has a reasonable price for youthful operators and will minor infractions cause the company to cancel?
• Drill into your child that speeding, running yellow lights and accidents cost money. Once you are canceled, the fact you have a youthful operator may prevent you from finding any company that will write standard auto insurance. Substandard automobile insurance is extremely expensive, and many companies will only offer limited coverages.
• Increase your collision or comprehensive deductibles. Eliminate collision and comprehensive coverage on older vehicles where the value of the vehicle is low.
• Don’t think about lowering liability insurance coverage. True the child has no assets, but you may not be able to avoid expensive lawsuits if your child should be involved in an accident where another is hurt. You could be found "vicariously liable" for not properly supervising your child. Don’t forget the "deep pockets" theory either... The other person is injured, the child has no money — but you do! Purchase higher limits of liability protection, and ask your agent for a quotation about a million dollar umbrella insurance policy.
• Your child owns a vehicle — should your child be insured under a separate policy? This remove the cost of the child from your policy; but will also eliminate the multiple car discount for the child. Your child will then want to purchase low liability limits to reduce cost. If the child causes an accident that injures someone, and the judgment is $300,000 but the coverage is $50,000; someone will have to pay the difference. Your child may be exposed to many years of salary garnishment and it is not out of the realm of possibility for the injured party to go after you for "negligent entrustment" of the vehicle to a minor. You would not have any liability insurance or defense coverage if the child caused the ccident in his/her own car.
• In a two parent household, if you start with two vehicles and your child becomes licensed, your child is normally an occasional operator of one of the two vehicles, unless you give your child more or less exclusive use of one vehicle. If you then purchase another car, the child then becomes a principal operator of one of the vehicles. Insurance rates can often double for principal operator youthful drivers. Compounding the problem – some companies assign the most expensive vehicle to the youngest operator. If you don’t need the third car...(In a one parent household, adding a second car usually means having the youthful operator rated as a principal operator.)
• Giving your child the 10 year old clunker to drive may not be the wisest thing to do. Even if the vehicle is well maintained – does it contain air bags or anti-lock brakes? If a teenager is statistically more likely to be involved in a serious accident – do you want to send your child out in a lesser protected vehicle?
• Seat belts. No alcohol. No drugs. No guns. Period. Set an example. Don’t you drink and drive.
• Establish with your child, even before the child begins to drive, that driving is a privilege; not a right. Only the state can revoke a person’s license, but a parent can revoke a child’s driving privileges at any time.
• Some companies will give credits for youthful drivers who attend defensive driving classes. Beyond that, the reason that many children have accidents is that they don’t know what to avoid or know the signs that the other driver may not do what we expect.

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