Car / Umbrella and teen driver (California)

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badger42
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Car / Umbrella and teen driver (California)

Post by badger42 » Fri Jan 11, 2019 1:35 pm

Note: We live in California, I suspect non-CA information is marginally useful at best, except maybe company suggestions.

My daughter turns 15 soon, At 15 1/2 she will be eligible for drivers' ed and a learner's permit. We plan to do driving school, probably somewhat over the minimum hours as local driving conditions are quite challenging.

Before I call my insurance company (Liberty Mutual - not tied to them but they've been fine so far, great alumni discount) and ask (and have the inquiry on the record):

When your teen started driving, did you need to add them to your insurance on a learner's permit, or only when they got a license?

How much did it increase your liability premiums? (old Subaru, we carry liability only, clean record, about $500/yr for 250/500/100)

Most importantly - were you able to keep umbrella coverage? How much did it increase you premiums?

I'm trying to figure out if we're looking at on the order of a percentage increase (e.g. +50%) or more along the lines of a multiple (e.g. 4x or 5x).

If you had a good experience with a teen driver and high liability limits / umbrella insurance, company recommendations gladly heard - with our current/future assets and the current local liability environment, I would think hard about "not driving" if we could not get umbrella coverage.

RickBoglehead
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Re: Car / Umbrella and teen driver (California)

Post by RickBoglehead » Fri Jan 11, 2019 1:40 pm

Your teen can't drive 10 feet without adding her to your policy. You can't add her to umbrella policy without adding her to car insurance policy.

The impact depends on male/female, age, vehicle being driven (some companies assign the vehicle, doesn't matter what she drives), location, ... Males are more expensive than females.

Most find that a teenager is a multi-thousand dollar impact or close to it.

You CAN say "no driving until age ____". When we lived in PA, it was 16. Moved to Michigan, it was 15 1/2. Son said "hey, I can start driving sooner here." We said "nope, 16.".

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Kenkat
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Re: Car / Umbrella and teen driver (California)

Post by Kenkat » Fri Jan 11, 2019 1:48 pm

In Ohio, I didn’t have to add my teen drivers to my policy while they had a learner’s permit, only when they got their license.

It cost around $125/mo. to add a teen male driver to my policy. There was no change in cost for my umbrella policy.

I don’t think asking about adding a driver is going to reflect negatively as an inquiry on your policy. This is pretty typical stuff to ask about.

RickBoglehead
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Re: Car / Umbrella and teen driver (California)

Post by RickBoglehead » Fri Jan 11, 2019 1:56 pm

Just to point out, many umbrella policies reprice annually. So, if you have a policy today, and your risks increase (teen driver), nothing changes today. Upon renewal time, your rate goes up. IF you questioned your company, you'd be able to understand what part of the increase was due to your teen driver.

I know I did this every year, because my kids had to pay their incremental cost once they had employment.

I also know it because when they left, there was no decrease until it came up for renewal. I had one son hang around too long, and so I made him not only pay his car insurance but also the impact he'd have on the umbrella policy for a year, because that would not be lowered.

Jack FFR1846
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Re: Car / Umbrella and teen driver (California)

Post by Jack FFR1846 » Fri Jan 11, 2019 1:59 pm

As the OP stated, non-California answers may not apply, except maybe the company.

As much as I wish Liberty Mutual were a good company, they're not. Go read reviews. And they give that discount to every alumni, every car brand owner (I get letters from Subaru every year) every organization under the sun. Their safety test track is 5 miles from my house, so I really wish they were a better company.

Your insurance agent in California can tell you if she has to be added to your insurance. I know for sure that in Massachusetts and New Hampshire, they don't. When a kid gets a license in Mass, that's when the kid is added and the insurance agent will know within minutes of the license issue that they need to be added. My agent called me to add my son at home while my wife and son were sitting at the registry, waiting to hear if he passed. Again, every state is different. My Jeep rate went from $700 a year to $2700 a year for insurance, so welcome to paying for teens.

Pay attention to the restrictions on the permit. In my state, the kid cannot drive out of state.

Good luck.
Last edited by Jack FFR1846 on Fri Jan 11, 2019 2:01 pm, edited 1 time in total.
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Typ997S
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Re: Car / Umbrella and teen driver (California)

Post by Typ997S » Fri Jan 11, 2019 2:01 pm

CA Resident here. Make sure you daughter gets added to your policy before she ever takes the wheel to practice, even in a parking lot. A few weeks ago my daughter hit a pole during her first "familiarization" drive in a parking lot. :oops: Happily, I had called my agent and had her added beforehand.

With regard to umbrella coverage, my experience with my first teen driver went like this...when he first started driving, there was no increase in the umbrella premium. However, after his first major accident (plus one of my own), our Car/Umbrella Insurer (Mercury), raised our Car insurance rates, and dropped the umbrella coverage. Our agent found us an alternative umbrella policy that was some what more expensive, but not outrageous. After my son's second major accident (totaled car and injured himself and took out a light pole), Mercury cancelled the auto policy and the Umbrella Insurer refused to renew. At that point, we put my son (age 20) on a separate policy (Progressive) with low limits, so that we could keep our high limit policy, which Mercury picked back up with him off. Our agent found us yet another Umbrella policy insurer, which actually was lower cost. My son is no longer covered by the umbrella policy, but my agent advises that this is OK as he is an adult now.

So, that's my sad story for what its worth. My key takeaways: having an insurance agent you trust is important (I've had mine for 30+ years), and making sure you always have coverage in force to protect your against any possible liability claims!

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Kenkat
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Re: Car / Umbrella and teen driver (California)

Post by Kenkat » Fri Jan 11, 2019 2:04 pm

My umbrella policy pricing did not change with the addition of new drivers, even at renewal in my situation.

Pricing policies are likely highly variable by company, state, type of drivers and vehicles, etc. Contacting your carrier is probably the only way you will get a good idea beyond some ballpark numbers here.

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Svensk Anga
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Re: Car / Umbrella and teen driver (California)

Post by Svensk Anga » Fri Jan 11, 2019 2:07 pm

RickBoglehead wrote:
Fri Jan 11, 2019 1:56 pm
Just to point out, many umbrella policies reprice annually. So, if you have a policy today, and your risks increase (teen driver), nothing changes today.
This is at odds with my understanding and experience. You likely have an obligation to inform the umbrella insurer of any change in your risk profile. If you fail to do so, they can decline to cover you. They can and do adjust premiums mid term in light of changed exposure. We added a second home, umbrella premium went up. Added a car, up. Sold a car, down again.

seems to me you cannot add drivers to a policy unless they are licensed: learner permit does not count. But this was long ago for us and your rules may be different. Check with the insurer.

RickBoglehead
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Re: Car / Umbrella and teen driver (California)

Post by RickBoglehead » Fri Jan 11, 2019 2:10 pm

Svensk Anga wrote:
Fri Jan 11, 2019 2:07 pm
RickBoglehead wrote:
Fri Jan 11, 2019 1:56 pm
Just to point out, many umbrella policies reprice annually. So, if you have a policy today, and your risks increase (teen driver), nothing changes today.
This is at odds with my understanding and experience. You likely have an obligation to inform the umbrella insurer of any change in your risk profile. If you fail to do so, they can decline to cover you. They can and do adjust premiums mid term in light of changed exposure. We added a second home, umbrella premium went up. Added a car, up. Sold a car, down again.

seems to me you cannot add drivers to a policy unless they are licensed: learner permit does not count. But this was long ago for us and your rules may be different. Check with the insurer.
I said "many", not all. AMICA does not. Your company may.

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SurfCityBill
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Re: Car / Umbrella and teen driver (California)

Post by SurfCityBill » Tue Jan 15, 2019 9:10 pm

CA response here.

In order to get a CA permit, a teen must take a course through a certified company either on-line or in a classroom setting. I have one child that did the classroom version and one that did the online version. Online tends to be less expensive and more convenient. Both did about the same on their written exam. Before applying for your test drive for a provisional license you will need 6 hours on professional in car driving done by the same company that offered the course and a minimum of 6 months with the permit and 50 hours of overall driving with parents, older siblings, etc.

At the time my first child applied for his permit, I had Auto Club of CA. They did not add him to the policy but said he was still covered. He was officially added when he received his license. This seemed odd to me but I had them send me an email confirming. They said as long as a licensed person was in the car with them then they were covered. I would make sure what your insurance companies policy is.

My wife and I were paying about $1200 annually for 100/300/50. Two older cars, no tickets/no accidents. We do have collision and comprehensive coverage. Adding my son made the rate increase almost 2.5X. After shopping all the major insurers we changed to Geico which was "only" about a 50% increase. Significantly less than the 2.5X sticker shock. We've since changed to 300/300/100, upgraded one car, and added 2 more along with a second child, and the Geico rate is still the most competitive I can find. I checked quotations recently in Sept with the major insurers.

We didn't have an umbrella policy at the time our first teen but quickly added one. Rate was $647 for $1M coverage, with a note on the policy that said, "Youthful Drivers" $268 which is included in the $647. This year the rate changed to $461, same coverage.

Good luck. I don't envy you. Teaching two teens to drive was a very stressful period in my life.

HereToLearn
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Re: Car / Umbrella and teen driver (California)

Post by HereToLearn » Tue Jan 15, 2019 9:17 pm

Not a CA resident, but wanted to suggest pricing the umbrella coverage with your homeowner's insurance.

I changed my car insurance to GEICO when I added the first teen driver. Their auto rate was very competitive, but their umbrella rate was high.

I notified the HO agent as each child obtained a license. I think car insurance requirement for permit vs license varies by state.

Spirit Rider
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Re: Car / Umbrella and teen driver (California)

Post by Spirit Rider » Tue Jan 15, 2019 10:41 pm

Driving laws are highly state-dependent, but in most states learning drivers are not separately insured.

In my state there must be a lincensed driver >= age 25 in the front passenger seat at all times. Any tickets or accidents are assessed to the licensed driver.

DrGoogle2017
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Re: Car / Umbrella and teen driver (California)

Post by DrGoogle2017 » Tue Jan 15, 2019 10:59 pm

We added my teens with learners permit, I don’t recall there was an increase. Only increase when they got the proper license. Don’t remember the increase after adding them, but they had very old car, 400,000 miles from my sister’s old car.

GenXer
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Re: Car / Umbrella and teen driver (California)

Post by GenXer » Tue Jan 15, 2019 11:33 pm

CA resident and parent of two teen (one now 20) drivers insured w/in the past 4 years: one in 2015, one in 2017. Called insurance company (CSAA) when they got their permits. Were told that we did not need to add them to policy until they received licenses. Rate nearly doubled: from less than $1000 to almost $2000 (two newish cars, one 2000 sedan that we hung onto for this purpose). Now that we have two extra drivers, the cost is about $2300. Called around to check rates in 2015--all were very similar but we got a discount for auto/home with CSAA so we stayed w/them. Have had umbrella since about 2013--it's been roughly the same cost since then.

DrGoogle2017
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Re: Car / Umbrella and teen driver (California)

Post by DrGoogle2017 » Tue Jan 15, 2019 11:45 pm

DrGoogle2017 wrote:
Tue Jan 15, 2019 10:59 pm
We added my teens with learners permit, I don’t recall there was an increase. Only increase when they got the proper license. Don’t remember the increase after adding them, but they had very old car, 400,000 miles from my sister’s old car.
All right, I did call and inform them about my kids driving with learners permit. It’s been a while. I’m also with AAA. It makes sense now I that I think about it, when a student is still on learners permit, a adult, mostly a parent has to be in the car, so technically a parent is involved.

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