New Auto Insurance Policies for Teenagers

July 18, 2008

A new phenomena is happening in the auto insurance world, some company’s are actively seeking out what were once considered only one step behind Nascar racers and Hollywood stunt drivers in terms of risk, .. The teenager.

Drivers aged under 20 make up just 6% of the total number of drivers on US roads. They also account for over 13% of all fatal accidents. The figures are however declining with 8% less accidents resulting in death during 2006.

Some well-known and established auto insurance companies have begun to offer significant discounts for young drivers and their parents. These new policies are offering insurance opportunities for young people that were previously unheard-of. They will require some commitment from young drivers and their parents in an effort to reduce the risk for insurance companies. These requirements will include participation in an online safety course and the need to keep a log of their driving activities for the teenagers auto insurance.

Other company’s stipulate that parents will have to make use of new technology that will allow them to remotely monitor the driving of their children. These moves to ensure young drivers have come about because of increased competition between insurers which have made it difficult for company’s to stop a drop in rates and to hold on to their existing clients.

Programs are intended to appeal to parents of teenagers and young people in that they do not carry increased premiums but can often double the cost of an existing policy by adding a young driver. Insurance companies are also hoping that insuring new, younger customers will breed a faithful client for money years to come
Restrictions that have been placed upon teenage drivers over the last few years such as limiting the number of passengers they can carry, and the hours that they can drive. Has also added to the insurance company’s perception that young drivers are less of a risk than they once were.

Nationwide insurance have just launched a program they call “SmartRide” by for drivers who are aged between 16 and 24, that offers them an additional discount of 5% as they take part in an online safety tutorial.

Safeco has its “Teensurance” policies aimed at drivers under the age of 25, which can offer as a 15% discount for young drivers who also pay $15 a month for a satellite-tracking system that tracks all the movements of young drivers. Safeco actually pays for the cost of buying the tracking equipment; $15 covers the tracking facilities.

Fireman’s Fund is now offering the opportunity for drivers up to age 27, who already have policies in their own name, to participate in their parents’ existing discounts, which should lower their premiums by up to 50%.

America’s largest auto insurer State Farm, is offering discounts of 15% to drivers aged under 25 who participate in its “Steer Clear” safety program. Under the program, young drivers are required to keep a continuous log of many aspects of their driving habits.

One unusual and practical, policy comes from American Family Mutual; its “Teen Safe Driver” system involves the use of ‘DriveCam’, which gives parents and the company a live in-vehicle video and audio feed. There are no fees of any kind for installation or monitoring of the live feeds.

Another insurer Fireman’s Fund has decided to sidestep the parents buy directly offering their “Youthful Driver” policy aimed at the young drivers themselves. Under the policy, the young driver can save up to 50% on regular auto insurance rates for young people. Under the scheme, young people get the same discount as their parents current cover allows.

Contact a capable online agent who can asses the best type of teen, young persons or student auto insurance policy for your children.

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