All parents have sticker shock when they learn how expensive insuring their new
teen driver is going to be. Especially in today’s economy everyone is looking for
ways to save money and reduce costs.
But you always want to keep in mind the primary reason you buy insurance; to
protect your assets from the unexpected large claim. No one really wants ‘cheap’
insurance, but everyone wants to feel they get good value for their dollars.
I’m going to tell you about the most costly
mistake you can make as a parent:
Lowering liability limits for teen drivers to save money
This mistake can cause you financial disaster. You have to remember that the
real purpose of insurance is to save you from the catastrophic claim, not the minor
bump-up. If your teen causes an accident that seriously injures others, you will
want the most coverage you can afford.
Many times parents will cut back their liability limits just to save a few bucks – thinking
nothing will happen. The fact is teen drivers are 5 times more likely to get into an
accident than an experienced driver and the cost of a teen driver’s claim is on average
3 times higher.
The smartest decision a parent can make is to increase the liability limits to at least
$250,000/$500,000 and add a million dollar liability umbrella. This is the cheapest way
to get great coverage. You can do this and still save money.
For more tips for Parents of Teen Drivers go to our Website and click the “Have a Teen Driver?” starburst.
