Edmunds dealer partner, Bayway Leasing, is now offering transparent lease deals via these forums. Click here to see the latest vehicles!
Insuring teenage drivers
Our soon-to-be-17 son backed into another student's car in the high school parking lot the other day. Police were called, but he was not cited because accident was on private property.
The other family has been very considerate in waiting to get quotes for damage done to door before (if ever) involving the insurance companies. If the repair quote is something relatively 'unexpensive' <!>, then I feel we are probably better off paying it out-of-pocket rather than our insurance company paying it. By the way, no real damage to his car.
Am I using correct logic here?
Our only past experience with the insurance company is that the ONE claim we had with them (my husband backed into someone...) -- after being a customer for 15 years -- raised our premium! The claim was only for $900, the premium was raised $300 per year. I couldn't believe it, other than that one claim our driving records were impeccable....
So now I am so very leery of reporting teen's accident.... it's my understanding that since he wasn't really cited and will get no points against his license, that the insurance company would have no way of finding out.
I am thankful that his accident was minor and no one was hurt... and hopefully this will serve as a very valuable life lesson. But, I am trying to avoid it being a life lesson that will cost 1000s in additional premiums over the next years...
The other family has been very considerate in waiting to get quotes for damage done to door before (if ever) involving the insurance companies. If the repair quote is something relatively 'unexpensive' <!>, then I feel we are probably better off paying it out-of-pocket rather than our insurance company paying it. By the way, no real damage to his car.
Am I using correct logic here?
Our only past experience with the insurance company is that the ONE claim we had with them (my husband backed into someone...) -- after being a customer for 15 years -- raised our premium! The claim was only for $900, the premium was raised $300 per year. I couldn't believe it, other than that one claim our driving records were impeccable....
So now I am so very leery of reporting teen's accident.... it's my understanding that since he wasn't really cited and will get no points against his license, that the insurance company would have no way of finding out.
I am thankful that his accident was minor and no one was hurt... and hopefully this will serve as a very valuable life lesson. But, I am trying to avoid it being a life lesson that will cost 1000s in additional premiums over the next years...
Tagged:
0
This discussion has been closed.
Comments
Thanks for your post :-)
Sharon
Hopefully tomorrow the car is going in for the estimate.... what appears minor to me may be an unfortunate surprise after seeing the estimate...hope not tho! Am not sure what my 'pay out of pocket rather than turn in to the insurance company' amount is :-) Probably something to do with the number of zeros, LOL!
Thanks again for taking the time to post,
Sharon
Didn't look like much but bill came to 800.00.
I paid the 250.00 deductable and let State Farm pay the rest.
Should they decide to raise my rates, I'll remind them that we have three cars, the house and other coverage through them and have sent them tons of money over the last fifteen years with minimal trouble. Would that make a difference? who knows?
Well...good, I didn't know that, thanks!
The estimate we're going with for the car my son damaged is *only* $500.... I was soooo relieved, at least not needing a whole new Grand Am door, etc. The other car's owner has been very helpful in trying to get us the lowest cost possible, we're very fortunate!!
This was a no-brainer for us to pay out-of-pocket thank goodness!!!!! I will heed the advice about the car's owner 'signing off' so to speak when we issue payment :-)
Since our son wasn't officially cited due to mishap being on private property, this was probably the best way a life lesson of paying attention when driving could have happened...! Without watching insurance rates sky-rocket...
Of course, now I'm more nervous again whenever he's out driving :-)
Sharon
Thanks for putting that worrying-stuff into perspective! The sound of his car returning to the driveway is a sound, however, that is music to my ears :-)
By the way, son will be paying the $500...when life's lessons hit the wallet, you are right: they are much better remembered!!
You're welcome for sharin <!>,
Sharon
My opinion is that there's gotta be something wrong with a system where car owners pay money to stay insured but then when they get in an accident they would rather pay out of pocket to cover the expenses than file a claim with insurance companies whose services they pay for.
If there are two potential claims against you, one for car damage and one for personal injury, you would be paying for the car damage (which you are legally obliged to pay in any event) and asking the other party to surrender a second right for which you are paying nothing. This seems to me to be overreaching and unfair and would be a poor way to repay the other party's generosity in finding the lowest possible estimate.
Last Thursday night I turned over a check for the $500 to the mom of the kid whose car my son hit.... and ended up not asking her to sign anything... I just couldn't do it as they are a very nice family and did try to be helpful to us :-) I should add that we have casually known each other for years and that helped me make this decision... I tried to reverse the situation a moment and wondered if I would have felt insulted if *I* had been asked to sign something after being so cooperative.
I sincerely do appreciate all of the advice that was given to me here, however!!!!!
AuntBea, thanks for sharing, it's nice to know I'm not the only mom like this! :-)
Regarding the discussion of insurance premium payments and then submitting (or not) a claim... My husband and I had been paying--for 20 years!--premiums every year to the same company for auto and home. Almost (ok, 1 minor ticket) a perfect driving record after that, and no accidents that were our fault. *That* is why I was so upset when our rates were raised when a claim was put against us for a small repair that cost an amazing $900...!
The insurance agency income less the cost of doing business, less business taxes, didn't make me a lot of $. The most viable contribution to our retirement portfolio was, as in other families, a working wife. A wise man once said," Envy of others success makes your life unhappy."
we've been with State Farm for almost 20 years and heve bothered them for very little. A couple of windshields, stolen CD player etc.
The house is also insured by them.
And, I've shopped around once or twice when the premiums staggered me. Could we switch to Pemco or go elsewhere and save money? You bet!
One of the reasons we stay with SF is because of the thought that if a bad accident were to happen that they would consider the 20 years of loyality (and premiums) before dropping us or raising ou rates.
Friends tell me otherwise. They tell me that insurance companies simply don't care and would drop us like a bad habit if they suddenly decided we were a risk.
kinley?
About twelve years ago or so, a friend suggested that we switch from SF to Pemco telling me that we would save massive amounts of money.
So, I picked up the phone and called them.
A guy on the phone was VERY concerned about our driving record and asked me if we had ever had an accident or moving violation.
Never an accident, and my wife has NEVER had a ticket. I remembered that I had picked up a speeding ticket for 45 in a 35 a year before and told him that. BTW, that was my first ticket in probably ten years (I told him that) and I haven't had one since.
" WELL, WE ONLY INSURE SAFE DRIVERS!"
Huh...? I reminded him that this was my first ticket in TEN years!
He mumbled and grumbled and asked what kind of cars we drove.
Well, at the time one of our cars just happened to be a stock, nice Z-28 Camaro.
That did it! I don't recall his exact words now, but he let me know that Z-28's are only owned by immature people who intended to drive them fast.
I was rejected!
Let's see now....that happened twelve years ago...no tickets since...no accidents...LOTS of money sent to State Farm.
Think I'll stay with SF.
AAA dropped them. Told them they were "accident prone"!
This really happened!
Is there a website (or 2) that lists 'insurance value' for vehicles? For example, what the most is that a company will pay out for a claim for a specific model/year of vehicle...at what point is a vehicle considered 'totalled'....
Also, I'm wondering: we receive quite a few solicitations from companies to be our insurance carrier... Since our rate went up after the minor accident last year, and since we've also added the teen driver since, it probably makes sense to be a little more diligent in shopping around now! My apprehension about switching is that I'm leery that the initially-quoted rate may be a bit low just to make the switch enticing... and that it'll be raised substantially the following year(s)... keeping all things equal between years one and two, has anyone had that type of experience when switching carriers?
Looking forward to replies, Sharon
In my earlier post, I was kind of referring to insurance solicitations by stores, credit unions, etc. Seems like everyone nowadays is looking for insurance to offer :-)
Or were you referring to finding out insurance value for vehicles, would an agent have that info?
Thanks again,
Sharon
Thanks for taking the time to write such a detailed response! Very timely about the increase in insurance premiums: just got our house insurance bill yesterday, up 10% since last year with no claims (of course)... am worrying about a possible 10% increase in the future then on auto premiums because that would definitely be a hefty amount what with a teen driver...! Sigh, if only our income went up 10% this past year too :-)
In regards to values, maybe I'm confused but I was referring to not trade-in values but rather values the insurance company would pay if the car was damaged -- for example, at what point is it considered 'totalled'. I've heard these values are much less than even the lowest trade-in value?
Thanks for your opinion regarding best value for premium dollar, i.e., higher limit of liability vs. lower deductible (esp. with the teen driver now if we're not going to claim anything!) :-)
Sharon
On the other hand, companies could charge even higher premiums to build-up "reserves" (cash value, return of premium) in case no claims are filed, but consumers will protest that it's a "rip-off."
I do not handle P & C insurance anymore, but I concur with your wise advice: high limits on liability (300K BI, 50K PD), backed with an umbrella policy for $1M, high deductibles on collision and comp (at least $500).
Insurance is a very complex subject and not easily understood by almost all people, including those in the industry. Consumers would be wise to find qualified agents they can trust who are not only competent, but also ethical in their dealings.
This was AAA in Southern California. MUCH different than here in WA.
We were with AAA- So. Calif since I started driving. Thought they would be the same up here so we simply transferred when we moved.
Boy, were we wrong! Service up here is TERRIBLE compared to Calif. Switched to State Farm and never looked back.
While he has his learner's permit, he is covered by our policy. When he turns 16, he can be listed as an "occasional" driver on one of our two vehicles, or, if we get a 3rd car, he must be listed as the "primary" driver of one of them.
As far as rates go, they gave me a quote for him to be the "primary" driver on our '99 VW New Beetle. Since his GPA is above 3.0, it would be approximately $130/mo. If the grades drop, the rates go to almost $190/mo.
Now, my situation is this: wife doesn't believe in buying used cars (don't ask why; just assume it as a given). Agency suggested that a small, 4-door sedan would offer the best rates - Saturn and Honda Civic were mentioned specifically.
Comments? Suggestions?
PS whatever the cost, son will be paying his own insurance premiums.
this is a competitive industry, it might be worth while to shop it around.
Insurance is governed by state, not national, regulations. Even if the insurance company is a national carrier. Pay heed to KINLEY. Teen drivers living in the household are automatically covers as an "insured by definition" within the policy provisions. So is anyone who operates your vehicle WITH YOUR PERMISSION AND WITHIN THE SCOPE OF THAT PERMISSION.
In Hawaii, it is against the law to rate drivers based on age, gender, marital status, mileage use, or length of driving experience. The only allowable factors are driving record, claims record (of both drivers and vehicles - Hondas and Toyotas are targeted by thieves and have higher rates than comparably-priced cars), type of use (pleasure, t/f work or school, business), type of vehicle (age - for comp/coll, sports cars, hi-performance). The companies can ASK questions on any of the above (that's part of underwriting), but they can't discriminate beyond what's allowed. It is common for them to send a questionnaire inquiring whether you have a "young" driver in the household when the demographics indicate that its time to ask - like when you're in your 40s and have been insuring a minivan for some time, a sure tip-off.
If you and your neighbor have identical vehicles, use of vehicles, limits of coverage, driving record, and claims record, you should get the identical rates from the same company. The only areas of difference may be discounts for good students, driver-training, continuous longevity with the same insurer, and having other lines with that company (e.g. homeowners, general liabilty, other casualty). In fact, most companies require at least either the homeowners or auto policy be with them before issuing "umbrella" liability policies.
But, remember that each state is different.
The $130/mo quote was assuming that our son would be the primary driver of the Beetle (we are probably going to acquire a 3rd car when he turns 16). That quote includes a good student discount (3.0 GPA or above) and, since we've been with State Farm for many years, includes a longevity discount as well. Also, our homeowner's insurance is with SF as well.
So, what I'm hearing is that if we don't get a 3rd car and don't inform SF that our son turned 16, he's still covered when he drives either one of our vehicles? The agent mentioned something about an "occasional driver" rate, which sounds more and more like a profit scam.
I was aware that anyone who drives my car with my permission is covered, guess I never thought about it applying to family members.
So, when we get that 3rd car next year, the folks at SF suggested a small, 4 door sedan (Saturn, Honda, etc.) to keep the rates as low as possible for my son.
Thanks for all the feedback.
"No-fault" itself is often a misnomer, anyway. You're still liable for property damage to the other vehicle if you're "at fault." The NF applies to medical expenses for injuries suffered by you, your passengers, and pedestrians, regardless of "fault, but up to a limit or threshold. If you're not "at-fault," you are free to seek compensation from the other party (and his company) after reaching and exceeding the "threshold." Likewise, the other party can do the same to you if the situations is reversed. The threshold amount is a moving target here and is re-set annually.
This system leads to "claim-building" to exceed the threshold and commence a lawsuit after the insurance company either refuses to settle or offers a "go-away" settlement which the injured party (and their attorneys) deems insufficient. After all, it's pretty hard to disprove "whiplash" and "loss of consortionship" on the part of plaintiffs.
Son was paying about $1,200 year, $300,000 liability etc. Daughter about $800. So much depends on where you live so getting prices in this forum is sort of useless. Getting him a new car is "absolutely crazy". Not only will you pay through the nose for insurance but you can find a very safe, dual airbag, ABS etc. used car for him to start with for much less. Plus, no friends in car for first 3 months and limited to 1 firend after that. Friends in the car are proven to be a increased risk for accidents!!! Several states are passing laws preventing teenage drivers from having other teenagers in the car.