Why is Car Insurance for Teenagers So Expensive?

Reader Question: I recently got some insurance quotes for my teenage daughter, and I was shocked at how expensive it was compared to my current coverage. Why is car insurance so high for teenagers?

If I had a dollar for every time I heard this question, it would probably cover a steak dinner for two, including a nice bottle of wine. Fortunately, there's a very easy answer to this question. Teenagers are terrible drivers and a menace to society. :-) Just kidding.

Seriously though, teenage drivers do have a much accident rate than any other single demographic. In certain comparisons, teens are three times as likely to have an accident. After all, teenage drivers are just learning how to drive.

Because of the higher accident rate, teenagers also result in more damage and liability claims than other demographics. So car insurance companies compensate (usually) by charging higher premiums to cover teenage drivers.

How to Save on Teen Policies

Despite the fact that car insurance is usually more expensive for teenagers, but there are still some things you can do to save money on the policy. Here are some ways to save on coverage for teen drivers:

• Compare the cost of adding them to your (parent's) policy versus getting their own individual policy. In most cases, it's more affordable to add a teenager to your current car insurance policy.
• Ask about discounts for good grades. Many companies will offer such discounts, because they feel good grades are a sign of a more responsible youth. There is some logic to that. Sometimes, this discount can be as high as 25% off the premium amount, which is significant.
• Teach your teenager about safe and responsible driving. And, perhaps more effective, explain to them what happens if they get speeding tickets and other driving offenses. Their insurance premiums will skyrocket, and serious offenses such as DUI can result in the loss of a driver's license.
• The type of car your teenager drives will also affect the cost of the policy. Commonly stolen vehicles (such as the Honda Civic) and high-performance sports cars will cost more to insure than other "insurance friendly" models.
  

Getting car insurance for teenagers can be more costly than coverage for adults, but there are things you can do to save money on the policy. It's also important to get quotes from multiple insurance providers, so you can compare the cost and coverage of each policy. This is key to getting the best deal. You can use the box at the top of this blog to get started.

Related articles:
How Do I Find Car Insurance Online?
How Much Auto Coverage Do I Need?

How to Compare Auto Insurance Quotes Online

Auto insurance can be downright confusing. That's part of the reason we publish this blog in the first place, to help you make sense of your insurance options.

But there's one thing that has gotten a lot easier over the years, and that's comparing insurance quotes. In fact, there are nearly a dozen websites online today that allow you to compare auto insurance quotes from several companies at once, just by filling out a single web form.

It's hard to remember what life was like before the Internet. Ten years ago, if you wanted to compare quotes from a handful of insurance companies, you'd have to spend a lot of time on the phone or driving around time. But not anymore. By using the one of the big insurance shopping websites, you can receive auto policies and quotes from several providers. And you don't even have to pick up the phone -- at least, not until you've chosen a company and want to move forward.

But not all of these sites are created equally. Generally speaking, insurance sites come in two types. There are the websites of the insurance companies themselves (such as Allstate.com), and then there are what I refer to as "shopping" websites. Here's the main difference:

• When you visit a site owned by an auto insurance company, you can't really compare quotes or policies. You can only gather information from that particular company.
• But when you visit an insurance shopping website, you're able to compare offers from several different providers at once. These are the sites I recommend using when comparing quotes for auto insurance policies.

There are several of these shopping websites online today, with new ones joining their ranks every year. They all have their strong and weak points. But there's one that I recommend above all others, and that's InsureMe.com. Their website is simple to use, and it lets you compare auto insurance quotes from some of the biggest names in the industry.

You can get started here: Shop and Compare multiple Car Insurance quotes for free.

Once you click on the link above, you'll need to indicate the year, make and model of the car you want to insure. Then you'll be asked some questions about how you use the car, including the estimated yearly mileage. You can also get discounts on your auto insurance for having an alarm system on the car, keeping it in a garage at night, and other things. The website will ask you about these things as well.

After the basic information above, you'll be asked how much comprehensive and collision coverage you want. The website will tell you what the most common options are, which is really helpful. You may also want to read this article on how much coverage you need to purchase.

Other Places to Compare Auto Insurance

I've given you my pick for the best website to use. I've even included a box at the top of this blog you can use to compare quotes from auto insurance providers. But in the interest of making this a well-rounded and objective article, I'd like to give you some more websites to check out. Here are some other sites you can use to get insurance quotes online:

• InsureMe.com (recommended, see link above)
• Esurance.com
• InsuranceQuotes.com

So let's summarize what we've covered in this lesson. The Internet makes it very easy to shop and compare car insurance policies. There are two main types of websites -- the ones owned by individual insurers, and the "shopping" websites like those listed above. I recommend using the shopping sites, because it's the only way to truly compare quotes from different auto insurance companies.

I hope you've found this guide to auto insurance helpful. Good luck.

Insurance Information Online - 5 Great Websites

When you're shopping for a new insurance policy, you need all the information you can get. This is especially true for the bigger policies, such as life insurance. Only through careful research can you choose the best policy to meet your needs.

Normally, I use this blog to provide insurance information and advice directly to readers. But there are dozens of excellent websites online that offer great insurance information for consumers, and I highly recommend you visit these sites to continue your research. Here's a list of websites I refer to on a regular basis.

1. Insurance Information Institute
The name of this organization says it all. They offer a wealth of tools and resources to help you choose the best insurance policy. They cover all major topic areas, including auto, health, life, disability insurance and more. A great source of information and advice!
www.iii.org

2. InsureMe
The primary purpose of this website is to help you get insurance quotes online (and we highly recommend it for that purpose). But you can also find plenty of insurance information on their website, click on one of the main tabs in the site menu and then scroll down. You'll find dozens of articles that will answer any question you have about insurance. I particularly like how the split their articles into the "Basics" and "Features." It makes it really easy to find the insurance information you need, without sifting through things you don't need
www.insureme.com

3. MetLife
Most insurance company websites have some kind of learning center, and MetLife is an excellent example of this. They offer all types of policies, but they specialize in life insurance. They information they offer includes basic overviews, FAQs and more.
www.metlife.com

4. Your State's Insurance Website
Every state in the U.S. has some kind of insurance information center. I recommend this as a source of unbiased information (they are not trying to sell you anything). Using Google is the easiest way to find the appropriate section of your state's website. Do a search for "insurance information," followed by the plus sign and your state. For example, a person in Virginia would search "insurance information +state of Virginia" ... without the quotation marks.

I hope this list helps you conduct the necessary research before choosing a policy. It's important to understand what kind of coverage you need before getting quotes from providers, and this is especially true for the more complex policies such as life insurance. Use the websites above to educate yourself, and you'll make better decisions in the end. Good luck.

Get Term Life Insurance Quotes Online - Start Right Here

Are you shopping around for term life insurance quotes, in order to compare cost and coverage? If so, you've come to the right place. Through this website, you can get quotes from such well-known providers as MetLife, Allstate and State Farm. You can also learn about the many benefits of getting term life insurance offers via the Internet.

If you're already convinced that online quotes are the way to go, and you simply want to get started, use the box to the right. This will allow you to gather term life insurance information from several companies at once, quickly and easily. If you'd like to learn more about how the process works and what you get out of it, keep reading.

Term Life Insurance Defined

I'd like to start with a quick definition, for those readers who are just getting started with the research process. As the name implies, term life insurance provides coverage for your and your family for a certain period of time. The term can be anywhere from one to twenty years. This is vastly different from permanent life insurance policies that do not expire.

You might wonder why a person would get term life insurance coverage in the first place. Why would somebody want coverage for a limited period of time? For one thing, it's usually a lot cheaper than policies offering permanent coverage. So it can be a good option for people with budget constraints.

Getting Quotes Online

The Internet has made the insurance-shopping process easier in many ways. In particular, it makes it much easier to obtain quotes and other policy information. For example, you can use a "portal" type of website to get term life insurance quotes from several companies at once. And you only have to fill out the website form once. This is a great way to compare the cost and coverage of different policies, without spending hours on the phone or driving around town.

There is only website we recommend for getting term life insurance quotes, and that is the one featured at the top of this website. It's easy to use, and it gives you access to well-known providers. To get started, use the box in the upper-right section of this website. Choose "life" for the type of insurance, enter your zip code in the space provided, and then click the Start Quote button.

Health Insurance for Self-Employed People

In this lesson, we will discuss some of the challenges of finding good health insurance when you are self-employed in your own business. I'll also share some of my own experiences with the process, and what I learned along the way.

I am self-employed and recently had the "pleasure" of looking for health insurance. Let me tell you, it's not an enjoyable experience. For one thing, I was baffled by the upfront investigation the insurance providers put me through. I never had to answer anything but basic health questions when getting covered through an employer.

But getting health insurance when self-employed is another thing entirely. It took a series of phone calls, multiple requests for health records from doctor's offices, and even an attempt at third-party investigation. That's right -- the insurance provider wanted me to sign away my rights for consumer protection and privacy so a third-party investigator could look into every aspect of my life. Why? Because they are looking for reasons to deny future claims.

This is how the health insurance system works in this country, especially when you are self-employed and getting your own insurance policy. Basically, they will research your medical history in advance so that they can file more claims under "pre-existing condition" later on, when you file a claim. Health insurance has gotten progressively worse in the U.S., year after year. If you are self-employed, this is even more true.

It's a broken system. It's a system that needs serious reform. But for now, it is what it is. Here are some tips on getting health insurance when you are self-employed, based on my own experiences with the process.

1. Don't Let Your Current Insurance Lapse

If it's not too late, don't let your current coverage lapse when making the transition to self-employment. By this mean, I mean you should get Cobra or some other form of insurance extension when you leave your "day job" and move into full-time self-employment.

If your insurance coverage lapses, you'll end up paying more in premiums and you'll be more susceptible to pre-existing condition clauses. Don't ask me why it works this way -- it just does. Generally speaking, a health insurance company wants to see at least 18 months of continuous coverage.

2. Research Your Options for Group Coverage

Look into professional trade groups and unions, through which you can often get group rates. The Freelancers Union is a good example of this. Sure, you pay union dues to be part of the group, but the insurance rates are typically lower and you may not be subjected to such upfront scrutiny. This is a popular health insurance option for self-employed people. It's worth looking into.

3. Be Factual but Brief on the Phone

After you apply for insurance, you'll eventually receive a phone call from one of the screeners who work for the company. They will ask you a bunch of questions about your overall health, medications you currently take, previous injuries and hospital visits, etc. During this call, you should be factual but brief. Do not volunteer any information -- just answer the questions they ask, and nothing more.

Why should you watch what they say? Because the person who calls you is trained to dig up any information that might be used to deny future claims. This is how the health insurance industry works, especially when it comes to self-employed people on individual plans. The entire business model is designed to make as much money as possible while eliminating "losses" wherever possible. When the insurance company has to pay money toward a claim, they consider it a loss. So they will do everything they can to avoid paying your claims, often by using the dreaded pre-existing condition clause.

That's why you have to watch what you say during the screening call. Be factual, but as brief as possible. Otherwise, you're just giving them more ammunition to use against you some day. It's sad but true.

More Insurance Advice for the Self-Employed

This article offers basic advice about health insurance for self-employed entrepreneurs, based on my own experiences. But there's a lot more information available online, and you would do well to read as much of it as possible. Below, I've provided links to some helpful articles you can start with. All of them cover the self-employment angle of health insurance.

• http://www.nytimes.com/2008/03/27/business/smallbusiness/27sbiz.html
• http://www.businessweek.com/smallbiz/content/may2007/sb20070516_652331.htm
• http://www.bankrate.com/brm/news/biz/soho/20000911.asp
• http://articles.latimes.com/2007/mar/27/business/fi-insure27

Do you have an experience to share about getting health insurance? If you're self-employed and have some advice to share with the readers of this blog, you can email it to editor@homebuyinginstitute.com.

Getting Home and Auto Insurance from the Same Provider

Purchasing your home and auto insurance through the same provider could be a way to save money. This is good news, because most people who purchase a home already have cars as well.

First, let me start by explaining the need for (and the importance of) a home insurance policy. The primary benefit of homeowners coverage is the protection you get for your house and the contents within it.

But there's another big reason to start shopping for insurance early on -- you won't be able to buy the home without it. Nearly all mortgage lenders will require that you have homeowners coverage before the closing process. In fact, you'll probably have to submit a copy of your policy to them before settlement day.

So the next question is, where should I go to get insurance quotes on a homeowners policy? The Internet has certainly made this process a lot easier. These days, you can get online quotes for home and auto insurance coverage, which saves you a lot of time and energy. For example, you can use the box at the top of this blog to get policy quotes through InsureMe.com.

Multiple Policies for Home and Auto

Getting a quote through your current insurance company is another great idea, and that's the whole point of today's lesson. There's certainly nothing wrong with starting online for policy quotes, but you should also find out if your current provider offers discounts for home and auto insurance -- i.e., a multiple policy discount.

Of course, this will depend on which company you're using for auto insurance. If you're with a major company such as Farmers, then you'll be able to get both home and auto insurance coverage them (and you might save money by doing so). But if you car is insured through. But if you're with a company that only offers auto insurance, you'll have to go elsewhere to get quotes on a homeowners policy.

Here's what I recommend:

• If you currently have auto coverage, and you're in the process of buying a home, contact your car insurance company for a quote on the homeowners policy.
• You will need to provide the company with basic information about the home you need to insure, in order to get a quote. So you can only do this when you have an offer down on a house.
• Next, get some online quotes for home insurance like we talked about earlier. This will allow you to compare offers between your current company and others.
• If you're current provider offers multiple policy discounts for home and auto insurance coverage, there's a very good chance their offer will be lower than others. In that case, you're all set!
• Lastly, once your choose an insurer, you'll need to determine how much deductible you want on your homeowners policy, how much coverage you need, etc. This blog offers advice on these subjects as well.

Getting auto and home insurance through the same company is often a good way to get discounts on one or more policies. But you'll have to do some homework to find out if it's going to work for you. Get a quote for homeowners coverage through your auto insurance provider, and then get some additional quotes online. Compare the different offers for cost versus coverage, and pick the one that suits you the best.

Yes, it really is that easy. Purchasing home and auto coverage is a fairly straightforward process, and the whole process can be done within a day or two. I hope this lesson helps you get the right kind of coverage. Good luck!

How Much Auto Insurance Do I Need to Buy?

This is one of the most common questions among first-time car buyers. How much auto insurance do I need to buy? The answer, as usual, is that it depends. I'll offer some suggestions on how much insurance in just a moment. But first, let's talk about the different types of auto insurance coverage you can buy.

Liability -- This is the one type of coverage that drivers are required to have by law. Each state has a minimum requirement. So in order to find out how much auto insurance you may need, you'll first need to learn what your state requires in the way of liability coverage. Liability covers other people that may be injured through some fault of your own (their car damage, their hospital bills, etc.).

Liability also provides some degree of coverage for you, in the event that you are sued. You should start here when determining how much auto insurance you need, because this component is mandatory.

Comprehensive -- This form of auto insurance would reimburse you for expenses related to fire, theft, vandalism, or damage to your car from natural causes (hail, lightning, tree limbs, etc.). In other words, it protects you from damages other than those caused by a collision. And that brings us to the next type of auto insurance coverage.

Collision -- This is the part of your auto insurance that covers damages resulting from an accident, when you are the one at fault.

There are other types of coverage you may be offered by an insurance company, but the three listed above are the most common.

How Much Insurance is Enough?

Now that you know the different types of coverage, we can revisit the primary question we started this article with. How much auto insurance do I need to buy? We talked about the minimum coverage you are required to have by law (liability). This covers you and others when you are the one who causes an accident. So this is your starting point when determining how much insurance you need, because it's also a requirement for registering a car in most states. You simply have to have liability, plain and simple.

You should be able to find your state's minimum requirement by doing an Internet search. A handful of states don't have a legal requirement for liability insurance, but most states do. You can do a search on the Edmunds.com website to get started, or you could do a Google search such as: "Arizona auto insurance +how much liability required" ... plugging in your state, of course.

Some states also require you to have personal injury protection (PIP), also known as medical payments coverage. This would cover your medical expenses in the result of injuries from an auto accident. An insurance company can tell you what's required in your state, and you can also look it up on your state's DMV website or the official state website.

This brings us to the optional forms of auto insurance coverage. Here is where it becomes a matter of personal preference. How much comprehensive and collision coverage you choose should be partly based on the value of the car you are insuring. If you have an expensive car, you would want more coverage. On the flip side, if you're driving a low-value car, you might not need as much of these coverage types -- if any.

So, how much auto insurance do I need to buy? To answer this question, you must start with the minimum amount required by your state, because there's no getting around this. Then you should choose an appropriate amount of collision and comprehensive based on the value of the car.

Bonus Tip: Another good way to figure out how much auto insurance you need is to get an online quote from a provider. You can use the box at the top of this website to get started. When you get an online quote for insurance, the website will walk you through the various choices discussed in this article. Then you can figure out what that would cost you in premium payments each month.