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First Time Drivers and Your Insurance Premiums
By Dave Miller
Like death and taxes, an increase in your auto insurance premium is inevitable when an inexperienced driver is behind the wheel.
In Illinois, a 15 year-old can take Driver’s Education courses in high school and legally operate a vehicle with a learner’s permit (if one of their parents is accompanying them in the vehicle) but they do not need to be added to the auto insurance policy until they get their license.
However, we would encourage you to contact our office when your son or daughter begins Driver’s Education so we can follow-up and be sure they are added to both your auto and umbrella insurance policies on their 16th birthday. At that time we'll need their driver’s license number as well.
When your child is added to the policy, he or she will be classified as either a principal or occasional vehicle operator. How they are classified depends on the number of vehicles and vehicle operators in your household.
For example, suppose you and your spouse each have your own vehicle and your 16-year old daughter just obtained her license. There will now be three vehicle operators and two vehicles in your household. Your daughter would be classified as an occasional operator on the vehicle she would use most of the time. This does not mean she can’t drive the other car. It simply means that her “risk” is assigned to the car she is most likely to drive. Your auto insurance premium will increase with the addition of a new driver, but only on the car to which she is assigned. Depending on your insurance company, your personal umbrella premium may increase as well.
Now suppose that your daughter has badgered you into purchasing a third car. Now your household has three cars and three vehicle operators. She will now be classified as a principal operator on the third car and your auto premium will be higher than when she was an occasional operator. This is because she now has (in theory) 100% access to at least one vehicle in your household and the probability of an auto accident has increased compared to her prior “occasional” status.
Many of our clients also ask for insurance advice when they are deciding upon a car to purchase for their child. Many clients believe that a car with a “safe” reputation or a “5-Star” safety rating will mean lower insurance rates. Unfortunately, this is not the case. A vehicle’s safety rating or reputation is earned by that vehicle’s ability to protect its occupants. The auto insurance is mainly designed to protect the public at large from the actions of the person behind the wheel. In addition, a car that is better at protecting its occupants does so by absorbing and dissipating the energy in an accident. In plain English, this means the car is designed to fall apart when in an accident, which means more damage and higher repair costs. In summary, if you purchase a car for its safety rating, do so because it will protect your loved ones and not because it will lower your insurance costs.
Please use the following link Bensman Group Referrals to contact us with the names of specific individuals that would appreciate an introduction to our firm.