Will My Insurance Costs Go Up When 15-Year Old Gets His Permit?
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Marty Agather is the Vice President of Client Experience for TrustedChoice.com. He started his insurance career by filling multiple roles over a 10-year span in a mid-sized independent agency in Chicago, Illinois. Marty also writes for various insurance magazines and blogs and co-hosts a weekly podcast at AgencyNation.com.
Reviewed by
Marty Agather is the Vice President of Client Experience for TrustedChoice.com. He started his insurance career by filling multiple roles over a 10-year span in a mid-sized independent agency in Chicago, Illinois. Marty also writes for various insurance magazines and blogs and co-hosts a weekly podcast at AgencyNation.com.
Q: How much will premiums go up when our 15-year-old gets his permit this year?
A: A new driver in the house can be a mixed blessing. They can lend a needed hand in the transportation duties, whether filling their own needs or helping get others to where they need to be. There are added concerns as the new driver may be out of the immediate supervision. And there is the financial impact of adding an inexperienced operator to the family insurance policy.
There are too many variables involved in your question to provide a straight forward answer such as "Your premium will increase by 40%". Different insurance companies treat youthful (and new) drivers differently, but there are a few guiding principles. Auto insurance premiums are calculated based upon a number of factors which include where the car is kept, how much it is driven, the specifics of the driver of the vehicle (including tickets and accidents), and the car itself.
Statistics clearly show that inexperienced drivers have more accidents, and therefore most insurance companies develop surcharges for inexperienced drivers, which most often are applied to youthful operators.
If there are more drivers than cars, most insurance companies use a process where the most expensive operator is rated on the most expensive car, thereby generating a premium that is justified by the exposure generated by that driver. If there are enough cars so that every driver has a 'primary' vehicle, many companies let you assign the driver to the most frequently-driven car, so you can put your son on the 'kid's car'.
Big picture, if you have a multi-car policy, the price increase won't affect all vehicles, only the one vehicle to which your son is assigned.
Assuming the rest of your drivers don't have lots of tickets and accidents, it is probable that your premium could double on that vehicle. For this reason, some families find it advantageous to purchase a 'kid's car', of a certain age, so that only liability coverages, med pay/ PIP and UM/UIM coverages are on the vehicle, reducing the total premiums which are increased. This would be a good time to inquire with your agents to find out how your insurance company treats youthful operators with a car insurance policy.