Survey: Nearly half of American teens are clueless about cost of auto insurance
Forty-four percent of American teens have no clue about the cost of auto insurance, according to a new survey. That’s despite the fact for nearly two-thirds of them, buying a car would be a top priority if they received an unexpected $5,000 windfall.
Of the teens questioned in the Charles Schwab & Co. Inc. survey, 27 percent have their own car. Sixty-two percent of the teens surveyed said they’re interested in learning about the kinds of insurance they’ll need when they’re on their own.
“As parents, I think we can do a better job of not only communicating conceptual information, but also teaching practical money skills,” said Carrie Schwab-Pomerantz, a senior vice president at Charles Schwab. “Sharing how much we ourselves spend on necessities such as groceries, gas and insurance, as well as on extras such as clothing and entertainment, can open kids’ eyes to the real cost of living.”
The survey was conducted for Charles Schwab by Koski Research. The online survey polled 1,132 American teens ages 16 to 18 from Feb. 21 through March 14, 2011.
The Insurance Information Institute says teens often forget that the cost of driving includes auto insurance. The institute recommends that parents explain to their teen drivers how a traffic ticket or car accident can drive up insurance costs.
Adding a teen to a parent’s auto insurance policy can increase the premium dramatically, sometimes as much as 100 percent. That’s because teens generally lack experience behind the wheel and have a higher-than-average risk of being involved in a car accident. Car crashes are the leading cause of death among 15- to 20-year-old Americans.
How can you decrease the cost of auto insurance for a teen driver?
• Shop for good-student discounts. Liberty Mutual, for instance, offers discounts for teen drivers who carry at least a B average. That discount can result in savings of 15 percent to 35 percent.
• Have a teen drive an older, less expensive automobile. The value of the car is a big factor in setting auto insurance rates, according to Liberty Mutual.
• Consider raising your auto insurance deductibles. Going from a $250 deductible to a $500 or $1,000 deductible can cut your premium by 10 percent to 20 percent, the Insurance Information Institute says.
–InsuranceQuotes.com staff
