Online Auto Insurance Quantifies Coverage Options for a Family with a Teen Driver

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When it comes time for a young member of a household to start driving, parents face a difficult question: Is it better to add my 16-year-old to my own policy or to get him or her insured independently?

OnlineAutoInsurance.com has released the findings of its latest California premium analysis, which shows that putting a young driver onto an existing policy may, in most cases, be cheaper overall than purchasing a separate policy for him or her.

California car insurance companies use complicated pricing models that are not common knowledge for the average motorist, so a lot of the thought going into the decision of how to insure a teen driver may unwisely be based on speculation. In order to provide concrete examples for California families trying to determine their most cost-efficient option, OnlineAutoInsurance.com generated quotes for a father-daughter pair and went on to compare auto insurance costs under different coverage scenarios.

The site ran the rates for a 40-year-old divorced dad and his 16-year-old daughter, both for separate policies and for a combined policy. A total of 12 California insurers were used in the comparison. The results of the analysis showed that:

  •     The cheapest price for getting covered through a combination of two separate policies ($5,810 annually) was more expensive than the cheapest price for getting covered through a single, combined policy ($5,114 a year).
  •     The average price for covering the pair through a single policy was nearly $1,500 cheaper annually than the average total cost of getting two separate policies.
  •     Though the price of a combined protection plan was cheaper on average, it was not cheaper in every instance. One insurer’s quote for a combined policy ended up coming in at about $700 a year more than the total cost of getting two separate policies. On the other hand, one insurer’s rate for combined coverage was about $2,200 cheaper annually than the combined rates for two separate policies. This highlights the need to shop among different companies and to get quotes for different scenarios.

Whichever route ends up getting chosen, it’s important for families in the Golden State to start their pricing research early. California insurers can begin charging extra for a teen driver from the point that he or she receives a permit to drive, although not all do.

Source: http://www.insurance.ca.gov/0100-consumers/0060-information-guides/0010-automobile/upload/Eng_WhatHighSchool_Combined_Web.pdf

Getting the conversation started with a coverage provider should be done as early as possible.

To learn more about this and other car insurance issues, readers can go to http://www.onlineautoinsurance.com/compare/ where visitors will have access to informative resource pages as well as a quote-comparison generator that can allow consumers to quickly evaluate their coverage options.

Note on Methodology: The father-daughter pair used for the comparison lives in the 90039 ZIP code of Los Angeles. Liability coverage for each person was up to the limits of 50/100/25. The car being insured for the 40-year-old male was a 2011 Toyota Tundra with $500 deductibles for comp and collision. The car being insured for the 16-year-old daughter was a 2009 Toyota Corolla LE with $1,000 deductibles for comp and collision.

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Benjamin Zitney
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