Q. Why is insurance so expensive for teenage drivers?
A. The cost of auto insurance varies from one group of drivers to another because some groups have worse driving records, higher accident rates and more costly accidents than others. The highest insurance rates are paid by any male driver under the age of 25. His rate then hinges on whether he’s married and whether he owns or is the main driver of the car being insured. With the increase in young female drivers in the last twenty years, however, the accident rates between the genders are evening out. Drivers age 15-20 accounted for 12.9 percent of all the drivers involved in fatal crashes and 16 percent of all the drivers involved in police-reported crashes in 2006.
Q. Can I be added to my parents’ auto insurance?
A. If you drive a family car, you can be added to your parents’ policy. However, the cost of the policy will increase. (Some companies insure young drivers only on a family policy.) If you have your own car, your parents’ company may sell you a separate policy, but at a different rate than your parents.
Q. Do I have to be a certain age to buy my own insurance?
A. No. However, you must have a valid driver’s license. Also, in many states, you must be 18 before you can own a car without an adult’s name on the auto registration.
Q. How often do I have to renew my insurance?
A. Auto insurance policies usually last six months. Some last one year. You will receive a notice when it’s time to renew your insurance.
Q. Will my rates go up or will I lose my insurance if I get into an accident or get a ticket?
A. If you are not at fault in an accident, your insurance should not be affected. If you are at fault, get a ticket for a serious violation (i.e. drunk driving), or are involved in an accident that racks up expensive property damage (i.e. crashing into a tree), your rates may increase at the time of renewing your policy because you will be categorized into another higher risk group of people who have recently been in an accident. You can no longer be placed into the accident-free group that you were in before the accident.
Q. If I loan a car to a friend who has an accident, is he or she covered by my insurance?
A. Under most circumstances, someone using your car with your permission is covered by your insurance. If the person borrows your car with your permission and is involved in an accident, your insurance will pay just as if you were the driver. However, in some states, some insurers may limit the coverage.
Q. Should I report all accidents to my insurance company?
A. Yes. You should report all accidents even if you do not end up filing a claim. If you don’t report these incidents, you run the risk of being sued by the other people involved and your insurance company will be at a disadvantage in defending you.
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