LJWorld.com / If you have a teen driver to insure, shop for the right plan

Business

Adding to own policy usually cheaper

By Marshall Loeb - MarketWatch

July 20, 2008

This summer you may have a new driver in the family: your teen. With school out, teenagers will be spending more time on the road. This coupled with the fact that 16-year-olds have a higher incidence of car accidents than any other age group should be enough to make any parent nervous.

The right insurance plan can help calm your fears.

First, make sure your teen driver is insured and at the same time figure how to keep your costs as low as possible.

Consider these tips from the Insurance Information Institute, a nonprofit communications organization supported by the insurance industry, on how to choose the right plan:

¢ Keep teens on your policy. Typically you'll get a lower rate if you add your teens to your policy rather than purchasing a separate one. You can also get a multi-policy discount by adding them.

¢ Watch out for who is assigned to what car. Many insurers may assign a teen who is the most expensive to insure to the car that is the most expensive. Don't let this happen. A cheaper option is to assign teens to the least expensive car. But remember that this is the car that they must drive. If they get in an accident in a car that they are not insured for, penalties and hikes in the premiums will likely follow.

¢ Add some extra liability insurance. This will help you get off the hook for any damages caused if your teen gets in an accident and is shown to be negligent. If your teen does get in an accident, and the damages exceed your insurance limits, you can be sued for the amounts not covered by your insurance.

¢ Increase your deductible. Raising your deductible will save you money on your premium. For example, going from a $250 deductible to a $1,000 deductive can save you about 20 percent on your premium.

¢ Shop around. Insurance companies price policies for young drivers at different rates. Go on the Internet and compare prices before you buy a plan.