At Citizens Insurance, what if you add your 17-year-old child?

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At Citizens Insurance, what if you add your 17-year-old child?

This is becoming a more and more critical question, citizensinsurance.net face the flurry of distracted-driving related claims, increased complexity of auto manufacture and repair, the lack of return on the investment of mandated reserve funds, citizens insurance company of the Midwest is looking to minimize their risk exposure in every possible way. “Minimizing exposure” is underwriter speak for transferring [risk] exposure back to you, through exclusions. Due to the inherent moral hazard created when and if the insurance covers you in the act of committing a crime, i.e., vehicular manslaughter while intoxicated or under the influence, the insurance contract has built-in exclusions for liability and property damage done while committing a felony. These exclusions are allowed, and in the case of the DUI-related exclusion, are even encouraged by State laws. Many, if not most exclusions are entirely at the insurance company’s discretion. And as in the last question, who is covered under the policy is extremely important to understand, Even more for households that have teens or tweens who are or will soon be learning to drive on public streets using the family car.

It is also very important to understand that these exclusions can be changed at any renewal without verbal notice, and many times the written notice legal requirements are met in the sending of a paper copy of the entire contract summary. For a consumer to discover the difference between this coming six months vs. the six months just concluded would require that consumer to dig up the last copy of their summary, prior to amendment, then the consumer would have to comparatively read both copies, meticulously noting the minute linguistic differences, with staggering financial differences tied to them. The other way is to call and demand that an experienced rep goes through any major changes to the policy and the associated exclusions. Major changes that are hidden from consumers in mind-bending quantities of legalese are disclosed in advance to agents and reps. The hard part for the consumer will be penetrating the prepared talking point to get at the nitty-gritty details.

Many consumers, wanting to save money, will not report their youthful driver, (under age 25) to citizens auto insurance as a way to save premium. But if that driver has been licensed for more than one year at the time of accident where he or she is the driver, that accident may be excluded and if so, your youthful may be guilty of driving without the proper citizens auto insurance, which is a major violation, which will carry a hyperbolic premium when subsequently insured by high-risk insurance companies. Understand, ideally before your teens are licensed, while they’re still tweens, what will happen to your premium, and how Citizens insurance Howell mi will handle it when they get their learner’s permit, and when they finally get that coveted symbol of adult status, the license to drive. That will give you the most time to comparison shop.

If you have teens driving, either, pony up the bucks, take away the keys or the old standby of buying junior and old, but reliable “junker.” The older the car, the cheaper it will be to repair, and therefore insure, even if junior is driving it. Fleet vehicles that it makes and models often bought by police departments tend to get surprising gas mileage for their weight and engine size, are remarkably sturdy in a low-speed collision, hold the road exceptionally well, tend to run well, in spite of high civilian mileage or chronological age, or both; and have standardized parts that are cheap to buy.

Sum it all up, and consider that large, grandma or grandpa car that took its owner faithfully to the doctor, grocery store and church for years. These cars are often in near mint condition, in spite of being 20 or more years old, and can be bought for cash on estate sales. Many retired owners will take their car in for an oil change for the social outing, to maintain the owner, more than the car. Domestic manufacturers also turned out similar makes or models on the same chassis that widen the inventory of available, reliable, affordable vehicles for junior to drive. And paying cash for the car allows for liability only coverage. The exposure that junior will face having to pay for repairs to his own car out of his own pocket will be a nice reminder to make good choices and ignore what the hormones are saying.

This is one case when States allow for gender discrimination. The boys pay more. Those raging teen hormones lead boys to make poorer choices on average than the girls, with each boy claim averaging significantly higher per claim costs. So, teens have higher claims frequency, and their average claim carries a higher cost than a similar claim for an older driver, and all of the stats show, boys have the highest claim frequency and dollar amount average per claim. The data are so overwhelming in favor of differentiated pricing based on gender, even the most liberal anti-discrimination groups that work pro-bono, won’t take up the cause because the evidence to too clear.

What happens if your child is a good student, or has no record of irresponsible driving? What happens when your child goes to college across the country next year?

As stated earlier, the evidence that a teenage driver, in particular, teenage male drivers will probably make some really poor and costly choices is overwhelming. So much so, that you are going to have to prove, or document, that your child is different. This is done with good grades. Again, overwhelming statistical evidence shows that ‘A’ and ‘B’ students are involved in claims less often and each claim is less costly on average than kids with poorer report card marks. This will take some, but not nearly all of the sting out of their youthful status. Even youths that get good grades lack the judgment that comes from experience.

When a youthful go to school more than a certain distance away from mom and dad’s home zip code, there may be a discount available where the underwriters account for driving only during the summer, because of the increased daylight hours and lack of snowy conditions, and on breaks, such as Thanksgiving, Christmas/New Years and Spring break. Citizensinsurance.net allow their underwriters to account for this greatly reduced [risk] exposure and extend a discount.

Each birthday your youthful has will decrease his or her premium accordingly until they are 25 and no longer considered youthful. This will be priced by the number of days each policy period your child will be a particular age. This is because underwriters have nothing better to do all day than perform age-pro-rata calculations, some of them even find such calculations soothing or enjoyable.

Be sure to know how your current coverage works, and to comparison shop, not only on the bottom line premium but on that promise to pay. The idea here is to buy the most generous promise to pay for the smallest amount of premium. If you spend 10 to 20 percent more, you may find the promises to pay, (insurance clauses) that you buy are significantly more generous. Citizens auto insurance compete on low premium and want to help you with upfront savings on premium; you have to make sure that those savings for bare-bones coverage don’t cost you a pound of flesh in the event of a claim.

 

Kimberly Allen

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