Wednesday, April 22, 2009

Auto Insurance For Teens

One of the big shocks of life is adding a teen driver to your insurance. We had already added a daughter a couple of years ago so I thought I was prepared when it came time for my son to be added to our policy. Boy, was I wrong. When the insurance agent gave us the amount I think I audibly made a noise. But, I just paid it and adjusted our budget. Big mistake!

Two weeks ago I was checking our online banking account and the insurance company withdrew $550.00 from our account. We were on automatic payment and our bill has been $165- $174 each month. So, I called to see why that amount was taken out. I have not received any notice or bill for that amount. I rounded up all our recent bills and had received a bill for the six month premium amount with a note at the bottom not to pay this bill because we were on automatic payment. Nothing on there about the extra charges. The agent told me that there was some fees for the changes we made. Okay, when we added my son I asked for a quote. She just added him onto my husband's truck which is newer than our Camry. She did that because my daughter is listed on the Camry and they cannot have two teen drivers listed on one vehicle. (Remember, I had asked for a quote, not to be added, like the agent did.) So, I asked if she could move my daughter to the truck and put him on the Camry since she is 18 and cheaper to insure. Also, we had full coverage on the truck and liability only on the car. The agent switched them and told us the amount for coverage and it was really high, so we decided to take the truck to liability only.

So, when I called the agent with questions about the $550 deducted from our account she said part of it was for the normal monthly billing and then there were some fees for the switches we made. Stop it right there, fees? I was never told about any fees, never billed any fees. So, I asked how much the fees were. Are you ready? $315.00!!!!! I exclaimed loudly and said, "Oh my G, I cannot believe you are charging me $315 for fees that you never even told me about!" My son got onto me for using the Lord's name in vain. I argued. I asked why she didn't tell me there would be a fee for switching and she said it is because she didn't know the amount, but there were always fees. I told her with State Farm we never had any fees. I also told her that she needs to let people know there is a fee but she doesn't know the amount so that they know. She became snotty and told me she would go put a sticky note on her computer right then.

In the end, it seems as if there is nothing we can do. One problem is that we had the automatic bill payment and it is taken. My husband didn't want automatic billing and the words "See, this is why."came out of his mouth. If we were paying we would have received a bill, questioned it, refused to pay, changed insurance companies if needed. Now, there is little recourse. After paying this bill, and dropping to liability only on our truck the monthly bill was still $270 a month- $100 over what we paid for full coverage without him added. I called around.

When we bought the house a year ago we were with State Farm. I called to get insurance on the house and it was cheaper to change to Farmers for home and auto insurance. I didn't know that Farmers is not writing their own insurance but piecing together policies from other lesser known companies. They shop for your coverage. Well, they are writing my son with a high risk company just because he is a boy and 16. I called State Farm and got a quote. With all four of us drivers and liability only on the Camry and truck it is $145 a month- from $270 at Farmers. What originally was a better rate turned out to be so much higher and so much riskier.

What am I taking away?
  • It really hurts and makes you feel violated to have money taken from you.
  • Our Farmer's agent was not nice- she was really snotty.
  • Check rated yearly with other companies, don't assume because it was the cheapest last year that you can't get a better rate.
  • Have your kids take drivers ed for the discount. My son couldn't get the class last semester but is in it now and we will get a further discount at the end. He doesn't even have to drive since he has his license already.
  • Tell your kids that they have to have all A's and B's for the discount and if they don't then they will pay their own insurance.
  • Since the two cars only have liability coverage I tell them that if they wreck the car then they will not have it replaced. Nice bike, cool Nikes.
  • If you have newer autos with high insurance it is worth it to buy an older car for a couple of thousand to put the teen driver on for insurance. It also gives your family another car.
  • We are not doing auto bill paying again. All our other bills, except water, is on auto bill pay so I don't know what we are doing with them. But, we are changing insurance and will pay monthly or whatever.
  • The anger at your insurance agent may make you think about using said car to run them over, but you have to let it go and just see what you can learn from the incident. Don't run them over, you will have even higher insurance if you do.
  • Your kids are watching you and how you react. It is okay to stand for your rights, but don't use the Lord's name in vain, and don't call the agent names outloud. Not that I did.


Dawn said...

Thanks for some really good info. We'll be adding our son very soon, too.

smilernpb said...

This is so awful. I really feel for you. In the UK it is more expensive for the 17-25 age bracket of people (you can't drive at 16 here, just on a 50cc moped scooter) so thankfully both hubby and I are way out of that now.

What we found, for us in the UK, is by having another named driver on the policy makes it cheaper by like £50 or so over the course of the year.

I DEFINATELY agree that they should not have changed anything without warning you about additional charges, surely you could write to the company, explain and ask for a full refund. Here in the UK, they cannot change a direct debit (I assume this is similiar to your automatic payment?) amount (or the date they are going to sake said amount) without telling you, and giving you 14 days notice. It's perhaps worth checking out where you stand on this.

Christy said...

Good grief! That's a rip off! A friend of ours used to work for Farmer's, but she quit because of their not-so-nice workings. Even when she worked there, she still had her personal insurance through Alfa! That should tell you something right there. I'm sorry you had to deal with that mess.

Lynette S said...

Yikes! I'm sorry you had to go through all that! I have been with State Farm since I was 16 and on my Dad's policy. There are times that I felt like I might get a lower rate elsewhere- but I did not switch because I feel like with insurance, service is a prime consideration. I was glad of that a few years ago when a dri=unk driver with no insurance pulled out in fron of me. My 1 year old van was totaled, and State Farm paid through our uninsured motorist coverage. We were very pleased with the service we recieved. Yes, they HAD to pay- we were covered. But the claims agent we worked with was very professional. But I've heard so many friend's horroe stories of trying to work with their own agents. Lesson: Switching just for a lower rate may cause you frustration when you need to file a claim.

momstheword said...

Have you tried to talk to her supervisor, and then his/her sup. if necessary?

That just doesn't seem fair, and at the very least, she was rude.

Our son didn't get his license till 18. They wouldn't accept his straight A's as he was homeschooled.

However, when he got his 4.0 in college they accepted that and lowered the rate.

We had an old truck and that was what he was licensed to drive. But now he bought his own car.

Southerner said...

momstheword- She is the agent owning her own office. She used to have someone answer the phones and you asked your question and waited for someone to call you back. In the conversation she said that she is the only one working in the office now. My husband said he was going to write the main Farmers offices, but apparantly they are individually owned franchises. I am going to let him do any further action. In the end $315 is not worth too much headache and well worth the things we learned. I am glad that we were not in need or a family that was laid off and barely surviving, that is who I hope this doesn't happen to. I told her that I am lucky we didn't bounce checks b/c of the withdrawal b/c usually we don't have extra money in that account.

Windy said...

State Farm also has a log that new drivers fill out for about 30 days and a video to watch, and you will get an additional savings, on top of drivers ed!
Also, be careful when/if you have to file a claim. When they piece them together from other companies, there is usually problems.

Rochelle said...

If you didn't sign anything authorizing the increase in your policy, and the increase in your monthly auto bill pay, you should be able to dispute this with not only the insurance agency but with your bank. I would definitely consult the bank and ask if there is a policy on disputing an auto withdrawal. Betcha there is. Good luck! Also, liability only is very risky these days! I definitely recommend uninsured motorist coverage to everyone. Its the only insurance that truly protects YOU. If you don't understand UM/UIM, please check with your agent. Its often not that much to get this coverage, and the agents don't necessarily recommend it (after all, if you have to use it, their company has to pay out) but its definitely a good protection for you and your family. I've seen way too many automobile accident files where people had no clue about which coverage they should have taken out to protect them. UM/UIM - definitely a must have in my book!

Michelle said...

I'm so sorry, insurance companies are a pain to deal with. I hope you have a better day tomorrow!

Anonymous said...

Beware of people taking from your bank accounts. I have had my health insurance company take a payment out twice. Once one day and again the next. My daughter happens to work at the bank and checks my account daily. I called the ins. company and they told me they realized the error and were putting it back in. Sorry folks, I don't trust anyone when it comes to helping themselves to my bank account. If you do, check your accounts on a daily basis. Pat

Southerner said...

Rochelle, Yes, we have uninsured-We don't need liability to pay for our car, the Camry is a 98 and the truck is an 00 model so it is not worth paying for the coverage. We would just buy another vehicle. We keep full coverage on the Yukon b/c it is not much difference to have full coverage and it is our main car and worth more.

momstheword said...

You are not kidding! I remember reading stories and I going to screen that???

momstheword said...

BTW, I was talking to a friend of mine about what this agent did. What if you filed a complaint with the atty general?

Anonymous said...

I'm brand new to your blog and this story is verrry interesting. We had a bad experience with a Farmer's agent and then dropped him and went with a different agent and we've had no issues since. It's pretty bad when people we are supposed to trust, violate that trust.

Kim @ Everything Etsy said...

My oldest is 14 and I don't even want to think about! Ahhhhh!

Thanks for stopping by...good luck!


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momstheword said...

you are so funny! I read the first line and thought, "Whoa, what???" then I read the rest of your comment...hehehe! You got me!

Where RU girlfriend??? Hmmm? BTW, do you have a twitter or facebook? That way I can stalk you(I mean....ummmm....follow you....)when you're to busy to post, lol!

Michelle said...

I'm so not looking forward to these days. I use to run an Insurance Company...I don't even want to get started on all the Insurance issues..but always shop around and don't put up with snotty agents..there are so many more who will better serve you!

I'm with the husband too...HATE the auto payment!

Good luck and wishing safe driving to your teens:)

Simply_Pam said...

I just went head to toe with my insurance co. I got some quotes from ohter insurance companies and went there with my guns loaded. I told them to either meet the quote or beat it or I was going to change carriers. My insurance dropped by $45 a mo. You might want to do some shopping around.
Ps: they did not change me for any changes made... what's up with that ?

Southerner said...

Yes, we have changed insurance agents back to State Farm- who we have had for 20 years minus the unfortunate year with Farmers. I would tell anyone not to use Farmers. I have written the main company telling them that it was not authorized to take my money. It isn't worth much of my time and any anger to keep pursuing this much if that doesn't accomplish anything. I am going to probably file a complaint with the insurance commissioner and BBB.

God has been so good to us and I am glad that it doesn't have to be a big issue right now.

When I had my first child Blue Cross denied all my claims because they had me listed as a male and i couldn't birth a child. A male named Holly married to another male going to the hospital to have a baby. Doctors delivering baby and treating baby. It took over a year of monthly contacting insurance to retell the story and try to get them to fix it. The doctors and hospital wanted payment b/c we signed that we would pay if insurance didn't. We received "we are turning you over to collection" letters and for a bill paying/ no debt kind of girl I was really upset.

Mrs. C said...

Contact your state attorney general's office! Their help is free! Please! You will save others and probably even get your money back!!