Got a "New Driver" in the House??

At this life stage, your cute little kids become teenage drivers, competing with you for the car. In addition – as you enter that mid-life period – your own automotive interests may steer you towards different types of cars than you’ve previously driven.

• When adding your teenage driver to your policy, be prepared to pay higher auto insurance rates. Although some states do not allow gender differences in auto rates, industry figures show that a teenage female driver can cause rates to increase as much as 50 percent, while a young male driver can boost costs by up to 100 percent.

• If you plan to provide your child with an automobile to take to college, check on the need for a separate auto insurance policy.

• At this stage of your life, you may be frantically transporting your kids – and their friends – to sports practices and other after-school activities. Given these chauffeuring responsibilities, you might want to consider increasing your liability insurance in case of an accident.

• Hopefully, your success in the job market is causing your net worth to grow. So you may want to consider purchasing an “umbrella policy” to raise your auto liability coverage, for example to $1 million, in order to protect your assets.

Here are some tips to prudently control your auto insurance costs:

• Ask about an “accident forgiveness” clause that promises not to raise premiums if a student gets into one minor accident. In addition, consider raising the policy’s deductible and only allowing their child to drive the family’s oldest, least expensive car. In addition, parents might consider purchasing an older car for their child and foregoing comprehensive and collision insurance on that vehicle.

• When you add a teen driver to your policy, it’s a good time to evaluate different auto insurance companies and compare costs, as firms differ in their policies for young drivers.

• If you’re planning to purchase a car for your young driver, keep in mind that auto insurance premiums are linked to the type of vehicle driven. If you’re buying or leasing a new car, check the insurance rates before you make your final choice. SUVs, convertibles and performance vehicles typically cost more to insure than some cars.

• Parents of new teenage drivers should encourage their children to maintain good grades and to take a driver’s education class, as these steps may help lower your insurance rates.

• In addition, keep in mind that if your child lives away at school (at least 100 miles) and has less access to the insured vehicle, you may be able to take advantage of insurance discounts.

• Remember that companies often grant discounts to those who are considered “safe drivers,” so try to keep your driving record – and your children’s driving record – free from accidents and moving violations for at least three years, or consider taking a defensive driving course.

• College Students and Auto Insurance: Parents and college students should do some homework regarding auto insurance. If a college student is going to be using the family vehicle when visiting home, parents should make sure the child is listed by name on the family’s auto insurance policy. If the student will be taking a car with them to school, parents should check the specific rates for the college’s city and state before deciding whether to keep their child on the family’s auto policy. In addition, the insurance company should be notified each semester if the student maintains good grades, as that accomplishment might lower premiums.