Expert: Richard Hixenbaugh - 3/20/2009

Question
My teenage daughter hashad her license for less than 10 weeks. While backing out of a parking space in the bank's parking lot she hit the rear passenger side of another car. Although the damage was only a dent the estimate is approx 1500 to 2000. We are not sure if we should just pay for the damages ourselves. Will the insurance company drop her, I have seen some information that says her insurance will go from 130 a month to over 300. Is this really what happens?

Answer
Hi Vickie,

As you already know, insuring a teenager is very expensive. A teenager with an at-fault accident can be substantially more expensive. The exact amount of any increase can only be determined by your insurance company as each company has their own guidelines.

If you or your daughter can afford to pay for the repairs out of pocket, this may be in your best interest. However, if the accident has already been reported to your insurance company you should let them pay because if they know about the incident, they will raise the rates even if they do not pay the claim. Before you give any money to the other party you should have them sign a full release form so they can not try to come back for more money later.

I hope this helps
Richard Hixenbaugh