How much does it cost to add teenage drivers to my insurance in GA?

The burning question for every parent when it comes to their kid’s 15th birthday.  How much is it going to cost to add them to my auto policy?

Let me be forthright and honest with you.  It is going to be expensive.  How expensive?  Take your current cost of insurance and double it.

Are we worried yet?  Understandably so, but understanding why makes the pill easier to swallow and, and at the end, we can discuss a few ways to help mitigate that cost.

When it comes to young drivers, it is not IF they are in an accident, it is statistically WHEN.  Insurance premiums are a reflection of the expense of the company incurs.  Those ratios come from a profile of clients and how likely they are to cost the company.  If the costs are high, the expense is high. When you add a teenager to the profile, the algorithms reflect a dramatic increase in risk.

Young drivers are merely inexperienced, not just in driving but in all things.  With that inexperience, they may not have the practice on how to recognize dangerous traffic patterns, how to deal with distractions in the car (high volume of the radio or how to not pick up a phone call while driving), or how to safely position themselves to avoid a loss.

So what you do to lower your monthly premium?

1. Shop your insurance provider

   1. Oh great, the independent insurance agent suggested shopping, who saw that coming?  I get it, but a common definition of insanity to do the same thing over and over again and expect different results.
   2. Insurance companies tell people no two ways:  A denial, or ridiculously high premiums.
      1. Their tolerance for risk and their diversity of the kind of people they allow into that risk pool will dictate how they feel about the additional premium to the increased risk of a teenage driver.  This is the fancy way of saying, each insurance carrier will provide a different rate.
      2. I love loyal clients, but I do not require their loyalty to work with me.  We offer a diversity of carriers to get the best rate.  Sometimes those carriers are not the right insurance company for every client.  As a consumer, you should feel the same way.  You might use Amazon for the majority of purchases, but sometimes another site provides the same product for less.  Do you feel guilty about not using amazon?  Now, when you purchase again, would you never use Amazon again or give them the first swing?

2. Defensive driving course

   1. In Georgia, drivers under the age of 16 are required to follow Joshua’s Law (click here to learn more).  Joshua’s law requires students to obtain some level of experience before getting a license.  Check with your agent to see if your current insurance provider will accept these requirements as part of the defensive driving discount.

3. Good Student discount

   1. Remember, when we discussed “risk profiles.”  When young drivers show above-average grades, it shows the insurance company that they are disciplined enough to understand how to delay gratification for a future result.  Will they ignore the phone call while driving, or will they hear a text and immediately see who it’s from and respond? Always ask your agent what is needed to show proof to the insurance company and get this discount if your teenager qualifies.

4. What kind of car you buy matters!

   1.  Legally the only insurance you NEED to drive on GA roads is Bodily Injury coverage and Property damage coverage.
      1. In GA, those limit limits show up as 25/50/25, which is 25,000 in bodily injury coverage per person, 50,000 total per accident, and 25,000 in property damage coverage.
      2. While that may seem adequate, please understand that people are expensive, and Georgia’s DOT reports an average for FOUR people DIE every day on GA roads.
         1. Each family’s needs are different; your auto liability limits should protect your assets should those limits fail, what can you afford to pay out of pocket?
   2. Comprehensive and Collision coverage are NOT LEGALLY MANDATORY.
      1. Should you purchase a vehicle with a lender, the lenders typically require Comprehensive and Collision coverage.
   3. Purchase a vehicle that will not break the family budget should your kid accidentally leave the car in neutral, and it rolls down the neighborhood hill into a tree.

5. DO NOT LOWER YOUR CURRENT LIABILITY  OR UNINSURED LIMITS TO SAVE MONEY.

   1. OK, this part isn’t about saving money.  As an agent who used only to be able to sell one company, a common tactic to keep a client after adding a young driver was to lower the cost by reducing the liability.  Since captive agents have a limited portfolio, the only way to reduce the rate is to lower the companies liability.  In this case, it is typically the insurance company that wins in these scenarios.  They give back a few hundred bucks a year, and they lower their liability from 100,000 to 25,000 — what a steal.

6. Telematics

   1. Have you ever heard your phone beep at you after parking your car, saying we have saved the location of your vehicle? That is telematics.  Most apps (especially free ones) collect data while they are in use.  Some are in use all the time.  Most even charge you so they can collect data on you while you use their product. What a steal, huh?
   2. Insurance companies are using this data to build better profiles.  Giving discounts to those individuals are at a lower risk.
   3. Not every company offers telematic options.  You should speak with your agent to see if this is an option with your current insurance company, and if it is not, would it be worth switching to one who does.

7. Tenure can matter

   1. Some companies, like Safeco, provide a tenured discount to insureds who have been with them for longer than a year to their young drivers.
      1. Safeco has pretty strict underwriting standards.  If you have a reasonable rate with them, it is because they view you as a lower risk.  They also understand most apples do not fall far from the tree.  If you are a good driver, your kid will likely be one too.

8. IF YOU HAVE AN AGENT-

   1. you should call and talk to them first.  The state licenses them and appointed by that insurance company.  No action or inaction will not change the outcome of a denial.

What not to do…

1. Please avoid internet forums/Facebook/Twitter and non-insurance professionals when it comes to insurance-related topics.

   1. If I had a dime for each time I came across a Facebook post asking for advice, and the litany of good-willed misinformation was given, I would retire today.  Enough said.
   2. Let me be very clear, not adding a licensed driver on your policy who:
      1. Lives in the house or
      2. Is blood-related
         1. It is by far the fastest way to get a denial letter, and having to pay for the property damage and medical bills of another driver.
      3. If you get advice from your agent suggesting that you do not need to add your driver, we will add them after they get into an accident, ask for that in writing.  You might need that email in the future.  Insurance is governed by the state, the contract that is written, and case law.  It is very clear in the vast majority of insurance contracts that insured MUST LIST drivers.  Failing to do so is an immediate refund of premiums and a denial.

If you are a client with The Weikum Group, give me a call!  I promise I don’t bite.  Education is key.  Finding out that Comprehensive and Collision costs $2,000/year after purchasing the vehicle will not help.

I love Insurance.  I have witnessed its value almost daily for the last ten years.  I am also not a fan of paying 1000’s/year if I don’t have too.

Education, advocacy, and access to carriers.