Auto Insurance for Your Teen Driver
They’ve had their learner’s license for a year, they’ve passed the driving test, and now they have their very own driver’s license: your teen is ready to head out on her own! Taking the car out for the first time is both fun and exciting for your teenager, even if it might be a little scary for mom and dad.
Of course, while your new driver was preparing for that first solo drive, you have been preparing to face that first insurance bill. Unfortunately, insurance companies see teen drivers as “high risk”; indeed, teenage drivers have 3 times as many car accidents per mile as drivers over the age of 20 and more than 25% of auto insurance claims are submitted by drivers under the age of 25. Therefore, car insurance rates are correspondingly higher for teen drivers than for drivers in their 40s with a clean driving record (for example).
However, just because your family has added a new driver doesn’t mean that your car insurance bill has to break the bank. While it’s a good idea to assume that your insurance premium will go up, it is possible to explore a variety of coverage options and get quotes from a variety of different insurance companies in order to save as much money as possible. At Sungate Insurance Agency, our insurance experts can help you understand the different options for insuring your teen driver in order to help you get the best coverage at the best possible price!
What’s Best: Adding a Teen Driver to Your Policy or Purchasing a Stand-Alone Policy?
Generally speaking, the cheapest and easiest way to insure your teen driver is to add him to your existing car insurance policy. By adding him to your policy, all of your coverages, limits, and deductibles will apply to your teen as well as any other named drivers on the policy. Your teen will also share the benefits of any policy perks you have earned, such as discounts for a clean driving record. If your teen is lucky enough to get her own car, you can customize the specific coverages on that car and even potentially qualify for a multi-car discount.
It is important to note that adding your teen driver to your car insurance policy will increase your insurance premiums. Moreover, if your teen gets a moving violation (like a speeding ticket, for example) or causes a traffic accident, you could lose any safe driver discounts that you have earned.
Another potential option is to purchase a separate car insurance policy for your teen driver. In most cases, purchasing two separate policies will be more expensive than having one policy with multiple drivers. There are some limited cases, however, where a separate policy might make sense: for instance, if an adult on the policy has been convinced of a DUI or has received multiple tickets, the premiums on a joint policy may be significantly higher than two separate policies.
Steps to Saving Money on Your Teen Driver’s Car Insurance
While it’s important to accept that your car insurance bill will go up when you add a teen driver, there are ways that you can reduce the amount that it will go up. Here are five easy things you can do to keep that car insurance bill as low as possible when adding a teen driver:
Look for Insurance Discounts
Some insurance companies will offer a discount on your insurance premiums for taking certain steps that they deem will make you a safer driver, and therefore a lower risk. Having your teen take Drivers Ed and/or a defensive driving class can lower your premium. And some insurance companies will offer discounts for good grades as well!
Drive a Safe Car
If you want to keep your insurance premiums low, getting your teen a fancy sports car is not the best approach. Cars that the insurance companies deem to be “safe”, such as those with enhanced safety features and good crash safety ratings, will have lower premiums.
Adjust your Coverage Options
Not every car requires the same level of coverage. If you do decide to purchase a car for your teen driver, you may want to remember that an older car with many miles may not need coverages such as comprehensive and collision.
Increase your deductible
The general rule of insurance is the higher your deductible, the lower your premium. So raising your deductible—the amount you pay out of pocket before insurance kicks in—can keep your monthly premium low. It’s important to remember, however, that should your teen cause a traffic accident, you will have to pay more out of pocket to cover any potential damages.
Keep a clean driving record
Remember, just because insurance companies see teen drivers as high risk, doesn’t mean your teen has to be high risk. Remind your teen that failing to follow speed limits and other rules of road, texting while driving, and causing a traffic accident can be extremely costly!
Increase your deductibles
Raising certain coverage deductibles from, say, $500 to $1,000 could cut down on your monthly premium. Keep in mind that you could owe more out of pocket if an accident does occur — but if your teen is especially cautious or rarely takes the car out, this could be a way to keep your premium affordable.
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