Driving Up Insurance Rates Boomers Struggling to Find Affordable Auto Insurance for Their Teens

By Finotti, John | The Florida Times Union, November 17, 1996 | Go to article overview

Driving Up Insurance Rates Boomers Struggling to Find Affordable Auto Insurance for Their Teens


Finotti, John, The Florida Times Union


Hang onto your wallets, Boomers. Your babies are getting old

enough to drive the Beemer, and that means your auto insurance

bills are sure to soar.

But don't let that get you down. There are ways to reduce your

insurance costs when you add junior to the family policy that

will allow you to keep the BMW.

It's easy to understand why teenage drivers pay higher auto

insurance rates, and why parents have cause to worry when their

youngsters cruise around at night.

In 1994, the number of auto crashes in the United States among

15- to 19-year-olds hit 2.8 million. Last year, 38,000 Florida

teenage drivers were involved in auto accidents.

"Between one-third and one-half of all teen drivers will have an

accident in their first year of driving," said Julie Rochman, a

spokeswoman for the Alliance of American Insurers, a trade group

based in Washington, D.C. "It's scary."

It's sobering statistics like these that help explain why

property and casualty companies are able to charge so much for

auto insurance coverage for teen drivers, say representatives

from the insurance industry and consumer groups.

When you add a teenage driver to your policy, it's not

uncommon for your annual premium to double, said Thomas Blum,

manager of Consumer Report's new Auto Insurance Price Service.

FINDING AN INSURER

You can save yourself big bucks, however, if you are willing to

invest some time.

As with hunting for any type of insurance policy, one of the

first strategies is to shop around for the best deals.

Some insurance companies deliberately charge astronomical

rates to cover teen drivers because they're not really interested

in the business, Blum said. Meanwhile, other insurers have carved

out a niche selling policies to first-time drivers.

"Auto insurance rates really can vary extraordinarily," Blum

said.

A Consumer Reports survey of companies selling policies in

two parents and a 17-year-old son with no tickets ranged from

$1,780 to $6,263. The survey was based on a low deductible of

$250 and relatively high liability coverages.

Consumer Reports recommends calling at least three different

insurance companies, preferably five, to compare rates.

If you don't have the time, inclination or phone skills, seek

the assistance of an independent agent who will have access to a

number of insurance carriers.

Consumer Reports created its Auto Insurance Price Service to

help consumers find affordable car insurance for their families.

The service is now available in six states, including Florida.

Georgia is not covered.

The service will provide you with the three lowest-price

policies, over the phone, based on the information you provide.

Additionally, a five-page report will be sent by fax or mail

showing prices for up to 25 policies for the drivers and vehicles

in your household.

The packet of information also includes Consumer Reports'

recommendations on the amount of coverage for various situations,

tips for saving money on insurance policies and advice on dealing

with insurance companies. The cost is $12 for the first vehicle

and $8 for each additional vehicle.

Don't overlook the insurance company you've been dealing with,

even after you get a quote for how much it will cost you to add a

son or daughter to your policy.

Many insurance companies offer a "preferred" auto rate to

customers who buy other types of insurance policies, such as

homeowners or life, from the same insurer. …

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