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Controlling the cost of your auto insurance when you have a teenage or young adult driver

Auto insurance can become very expensive when you add a teenager or other newly licensed driver, such as an au pair, to your policy.  Over half of all young males will have an accident in the first year of obtaining a license.  Auto insurance companies tend to charge for their presence on the policy with this in mind.

Rules for New Drivers

The rules for new drivers with respect to auto insurance are as follows:

  1. A permit operator who has not yet passed their road test must be listed on your policy, but a fee is not charged for their presence on the policy.
  2. Once a youthful operator passes a road test and is fully licensed, they must be added to the policy as a driver.
  3. If a young driver goes to college but retains your home as their permanent address, they must stay on your policy.
  4. If your driver goes to college more than 100 miles away and does not have a car in their possession at school, they usually qualify for a discount.
  5. If your young driver goes to college and has a car in their possession, the 100 mile rule does not apply.

To help discount your policy, the following may decrease your pricing:

  1. Good grades for the driver, generally B or better (3.0)
  2. Having certified classroom and behind the wheel training within the last three years.
  3. Having more cars than drivers, which allows a company to price a young driver as a parttime operator on a car.
  4. Having an older, liability only car for your teen to use – if all you have are newer sports cars, the pricing will be much higher.

A few general recommendations regarding coverage:

  1. It is almost never a good idea to have a separate policy just for your young driver.  This almost always costs considerably more money than having everything together, and presents the temptation for you to decrease coverage for your son or daughter, thereby increasing your exposure to a catastrophic lawsuit.
  2. You should obtain or increase your umbrella coverage when you add a youthful operator.  This will allow you to more adequately fend off a lawsuit if a serious accident occurs.

All situations are different, so please be sure to contact us at 973-284-1083 to discuss your particular needs.


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