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Auto Insurance - Guilty Until Proven Innocent

© Mike Gowen

As the father of three teenagers, two of whom are driving and one who soon will be, I am appalled at the cost of car insurance for young people. My daughter, who is eighteen and drives a 10 year-old Honda Civic, recently wanted to upgrade her car to something newer and more reliable. Keep in mind that I said newer, not new. She likes her Civic so we started looking at the Honda dealership at cars that were anywhere from 95 models to 98. My objective was for her to come out with a car payment that she could afford on her part-time salary she earns in the evening after attending college classes during the day. We found several cars that we thought had potential and took down some information to check on the insurance rates.

The next day I called her insurance company. First, since she has not yet been driving three years she is considered an inexperienced driver. It doesn't matter that she has never had an accident or traffic violation. For insurance purposes, she is inexperienced. The rate at her current, soon not to be, insurance company on a 98 Honda Civic was quoted at a cost of $5500.00 annually. I am not talking about a sports car with a high performance engine. I am talking about a Honda Civic, automatic with a 4-cylinder engine. Let me break that down for you. It works out to about $460 dollars per month for just insurance. So basically, if she finances a car and has a payment of $240, her total cost to drive will be $700 per month. Oh, and lets not forget gas, tires, oil, and other maintenance costs. Did I mention that this was not a new car?

She ended up in tears, resigned to the reality of having to keep her 91 Civic going. I ended up shocked and angry. Granted, since that initial quote we have found other companies and alternatives to reduce this figure but only by about half. My daughter would still have to come up with over $400 a month to drive a car that would require collision insurance. Is this really necessary? I see large numbers of young people everyday driving nice vehicles. Who is paying these premiums? Are Mom and Dad? In more cases than not the vehicles are probably registered to the parents and the child may or may not be listed as a driver on their insurance. I don't see how else they can afford it. We could have taken a similar route but my daughter wanted to stand on her own two feet. She wanted both the loan and car in her name. It seems grossly unfair to me that she and countless young people like her are penalized so heavily for wanting to be responsible. It's like being sentenced prior to being convicted.