Safety over speed

          Adult Vehicles

          Facts on crash protection

          Evaluate a vehicle's age and size

To most parents, the only thing scarier than seeing a teenage driver in the rearview mirror is seeing their own teen added to the family auto insurance bill.  Once a teen starts driving, the family auto insurance premium can go up 50 percent or more in many states.  Newly licensed teenage drivers typically pay the highest auto insurance rates of any demographic.

On the basis of current national population trends, there will be 23% ore 16-20- year-old drivers on the road in 2010 than there are today -- 26.1 million.  Thus, concern about the safety of teen drivers - and the cost of insuring them - is widespread.  While the number of teen-driving fatalities decreased nationally from 5,341 in 2001 to 3,657 in 2003, there is clearly much room for improvement.

To best manage that teen driver in the rearview mirror, parents should drive defensively.  Being on the offense is a parent's best means of controlling the financial impact of having a teen driver in the family.  This will also likely produce a safer teen driver.

A big factor in the cost of auto insurance for teens is generally the type of vehicle they drive.  For parents intent on controlling this critical variable in the teen driver equation, the following are "SAFE" tips on selecting a vehicle for your teen driver.  Additional information on minimizing teens' auto insurance premiums while increasing their safety is also noted below and includes drivers education courses, driving record and school grades.  Each of the factors noted below absolutely impact the cost of a teens' auto insurance premium, but exact savings can't be calculated without factoring in all the variables that state insurance regulators consider when establishing premiums.  A brief consultation with your insurance agent should provide specific premium prices.

Selecting an insurance-premium-friendly, and safer, vehicle for your teenager:

Safety over speed: The fact is that motor vehicle crashes are the leasing cause of death amount 15-to 20-year olds.  A fast car with a turbocharger and high horsepower-to-weight ratio that go from 0 to 60 miles-per-hour in less than 6 seconds can be enticing to teens.  Conversely, because many teens lack maturity and it is widely accepted that souped-up cars encourage teens to speed and drive recklessly, these vehicles are most unattractive to auto insurers.  So, if a teen drives a conservative vehicle with average horsepower not only will parents save on insurance costs - they may also save their teen's life.  Among licensed drivers, young people between the ages of 15 and 20 years old have the highest rate of fatal crashes relative to other age groups, including the elderly.  In fact, the risk of being involved in a fatal crash for teens is three times greater than for drivers age 65 to 69.

Adult Vehicles: The higher center of gravity in most pickup trucks and sports utility vehicles (SUV) causes them to be less stable than most cars.  This, combined with a teen driver's inexperience, makes teens more dangerous drivers than if they were behind the wheel of a traditional midsize sedan, which is less likely to rollover when steering is over-corrected.  Allowing a new driver to operate a SUV or pickup should be given careful though.

Facts on crash protection: Parents that consult crash studies empower themselves with critical information the safety ratings and features of specific vehicles.  This information is available from sources including the Department of Transportation and the Insurance Institute for Highway Safety. (http://www.nhtsa.dot.gov/cars/testing/ncap/pages/ResourcesLinksBSC.htm) (www.iihs.org).  All parents should heed the fact that of the 5,341 teens killed in crashes in 2001, two-thirds were not wearing seat belts, according to the most recent statistics available from the NHTSA.  If parents don't lead their teens by example, someone else will; the power of peer pressure was underscored by the findings of an informal 2003 survey of high school students participating in the seat belt safety curriculum, conducted by Volkswagen.  "Uncool" was the primary reason given by teens for not buckling up more often.

Evaluate a vehicle's age and size: While many parents can't afford to provide their teens with new or almost-new vehicles, passing on to their teen drivers vehicles that are too old can be counter productive and dangerous.  A primary consideration is that federal law required all new cars to have airbags beginning in 1997.  Being both pre-1997 and small can be a dangerous combination for a car, as teen drivers and passengers in small cars are at greater risk for bodily injuries in auto accidents due to the undersized physical structure of the vehicle and the absence of airbags.  Thus, auto insurers are likely to pay more medical expenses for policyholders driving older, smaller cars.  This results in higher premiums.  Teens with airbags - front and side- and anti-lock brakes were less likely to be among the 3,657 teen drivers that died in car crashes in 2003.  By opting for a post-1996, mid- or full-size car, parents could save their teens' life, not to mention create more college savings.

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Beyond vehicle type, other considerations for minimizing teens' auto insurance premiums include while increasing their safety:

Teen drivers that complete an accredited driver's education course are generally rewarded with reduced auto insurance premiums.  For example, in California, driver education and driver training courses must be conducted as prescribed by the Department of Education.  Driver Education must consist of at least 30 hours or 2 1/2 semester periods of professional instruction.  Driver training must consist of at least six hours of behind-the-wheel professional instruction.  The National Safety Council (www.nsc.org) often has information about where you can take such courses.

Teen drivers that maintain a good driving record can save on premiums.  Keep in mind that a teen driver in California cannot be eligible for the 'good driver' discount until they have maintained their license for at least three consecutive years.  Parents can influence this by emphasizing to the teens the importance of safe driving.  Teen driving performance often improves with driving experience.  Look for an insurance company that will automatically adjust the rate for each year a teen has been driving.

Teen drivers that earn good grades in school can save on premiums.  Students with a "B" average or higher (3.0 on a 4.0 scale) are considered lower risk drivers, as they generally perform better as drivers than students with lower grades.

Teen drivers should consider increasing their deductible.  Because of the higher premiums for teen drivers, often the premium savings over two or three years from increasing the deductible will more than offset the difference in the increased deductible.  The advantage is that if a teen driver doesn't have a claim, the money is in their pocket (or their parent's) not the insurance company's.  Of course if a teen driver has multiple claims they could be on the short end, as well as, shopping for a new insurance company.  For example (hypothetical): If the comprehensive and collision premium for two automobiles with a $500 deductible is $650, by increasing the deductible to $1,000 the premium is reduced to $450 or an annual savings of $200.  At the end of three years the teen driver will have saved $600 in premiums for increasing their deductible by $500.  Of course, this should only be done if the $1,000 is affordable in the worst-case scenario.  Parents should consider the highest deductible they can afford, but make sure to carry enough insurance to adequately protect themselves in a worst-case scenario.

Teen drivers with an older, but-still-save vehicle can opt to have neither comprehensive or collision insurance and save on premiums.  Collision pays to repair their vehicle if it is damaged in an accident, and comprehensive pays to replace their vehicle if it is stolen.  With many good used cars, minor accidents can be repaired for less than the annual cost of collision coverage.

Teen drivers with low-mileage-driving lifestyles can be classified as "secondary" or "occasional" drivers on their parent's policy and save.  But teens that drive to school or work on a regular basis are considered "principal operators".

Teen drivers - like all drivers - should shop around.  Thousands of drivers a day switch their auto insurance and save hundreds of dollars.  Today there can be as much as a 50% difference between companies.  State insurance departments often can provide typical prices charged by different companies.  When considering various insurance companies, it's important to pick a company that is financially stable.  Check the financial health of insurance companies with rating companies such as A.M. Best (http://www.ambest.com) and Standard & Poor's (http://www.standardandpoors.com/ratings) and consult consumer magazines.

While Internet sites quickly deliver basic coverage and premiums for comparison, by calling independent agents and brokers, you are likely to better review all your options on policies from several insurance companies.  An independent agent or broker such as Bannister & Associates can shop among several companies for you and find the one that best meets your needs.  Be prepared by having on hand your current policy information, driver's license and vehicle information.