Car insurance rates for teenage drivers can vary widely. Read on to learn about car insurance for younger drivers and how to save money on auto insurance for your whole family.
Key Takeaways
- Adding Family to Your Policy Saves Money: Including your teen on your existing policy is generally more affordable than getting them a separate policy.
- Take Advantage of Discounts: Look for good student discounts and defensive driving course discounts to lower premiums.
- Smart Choices on Cars and Coverage: Consider raising your deductible to lower premiums and discuss vehicular responsibilities with your teen.
Auto Insurance for Teenagers
When it comes to auto insurance rates, driving experience goes a long way to ensuring that your insurance stays cheap. It takes time for a teenage driver to acquire a good driving record. However, there are ways you can save on car insurance premiums for your teen’s auto insurance from the time they receive their license. That’s why it’s important to do your research and read these tips before choosing car insurance for your teen.
What’s the Cheapest Way to Insure a Teen Driver?
The cheapest way to insure a teenage driver is by adding them to your family’s policy. Buying a teen their own policy is very expensive and generally not advised. Depending on the state, a teen driver’s annual premium could cost up to twice as much on an individual policy versus being added to a parental policy.
Even so, parents are usually surprised when they see how much rates spike when their teen is added to their policy. According to a recent study by Coverage.com, the average rate increase for adding a teen driver to a policy is 130%! The study shows that adding a male teen driver sometimes has a larger rate impact than a female teen and that overall impact varies a great deal from state to state. That’s why it’s important to do your research before choosing car insurance for your teen.
Find a Teen Driver Discount
Some insurance companies offer discounts to help you save on auto insurance for teens. These can include good student discounts for those with at least a B average or a 3.0 GPA. Encourage your teen to excel in their studies, which not only benefits their future but can also lead to lower insurance costs.
Sign Up For a Defensive Driving Course
Passing a defensive driving course may also reduce rates. According to the National Safety Council, young drivers who take defensive driving courses have lower accident rates and, in turn, lower insurance premiums. Depending on the state you live in and your insurer’s guidelines, completion of such a course can reduce rates by as much as 10%.
Available online, these classes teach students techniques to use in emergencies, how to handle stressful driving situations, and how to anticipate and react to potential hazards. They learn to recognize dangerous and potentially threatening conditions as well as how to avoid them.
Consider Usage-Based Insurance
Usage-based insurance (UBI) programs use telematics devices to monitor driving habits. If your teen is a responsible driver, this can lead to significant savings. UBI programs track behaviors such as speed, braking, and mileage, offering discounts for safe driving patterns. Perhaps your teenager is not using the car a great deal. If your teen is listed as a secondary or occasional driver, you could potentially save money on the premium.
Review and Adjust Coverage
Regularly review your policy to ensure it meets your current needs. As your teen gains more driving experience, you may qualify for additional discounts. Adjusting coverage based on your teen’s driving habits and the car’s value can help keep costs down.
Keep in mind that, if your teenager is away at college and is not driving a vehicle, many insurance carriers will lower the premium during that period. Make sure to inform them if your teenager is not able to drive for a significant amount of time.
Raise Your Deductible
You can save money on your teen’s insurance premium by raising the deductible on your vehicle if you carry collision and comprehensive insurance. For example, if your current deductible is $500 and you raise the amount to $1,000, you will save money on your premium. That means you must pay out of pocket for repairs costing less than $1,000, but maybe that’s a deal you can make with your teenager. Let’s say they get into a minor car accident and repairs are under $1,000. Your teen should understand that paying for their vehicle’s maintenance and repair is their responsibility as a new driver. Just make sure you have the funds to cover the costs if or when your teen can’t do so.
Choose the Right Car
Young people may want the flashy sports car with a powerful engine, but such high-end autos really increase those insurance rates, especially for teen drivers! If your teenager wants his or her own car, consider buying them a used vehicle in good condition that doesn’t require collision or comprehensive coverage, and this will usually be cheaper to insure, leading to more affordable premiums for your teen.
Make sure to seek out a car with safety features that can also reduce insurance premiums. Anti-theft devices, airbags, and anti-lock brakes are some examples that can make a difference. Check with your insurance provider to see which features qualify for discounts.
If you are shopping for a car for your teen’s use, check online to calculate premiums by comparing car makes and models. You can also speak with or email an insurance agent to learn which models are the best value when it comes to a teen’s car.
Raise Your Liability Insurance
Buying additional liability insurance once your teenager starts driving doesn’t sound like a way to save money. However, while you will pay more in car insurance premiums, you are protecting your family and your assets when an inexperienced driver joins your policy.
All states have minimum amounts of liability insurance that drivers must carry. Many people carry more than the minimum in case they are involved in a serious accident. Because teenage drivers are more likely to get into accidents than other drivers, paying a little more for liability insurance can put some of your financial concerns to rest once your teens take to the highway.
Do the Math
While it is almost always cheaper to insure your teen driver by adding them to your policy, there are exceptions. That is why you must do the math before figuring out your best insurance options.
It’s vital to understand how insurers rate teenage drivers. If you have several vehicles on the policy, the insurance company will usually rate the new driver for all vehicles, not just the one set aside for your teen’s use. If every car has full coverage, meaning collision and comprehensive insurance as well as liability, getting your teenager a separate policy could be cheaper than adding them to yours. Many insurers will offer a discount on a separate teen policy if they live under your roof.
You can also discuss alternatives, such as excluding the teen from driving other vehicles. However, that could end up causing inconvenience if the teen’s car is undergoing repairs or otherwise unavailable, and they cannot use another family car due to lack of insurance.
Teen Drivers and The General®
Remember, the goal is to provide adequate protection while keeping costs manageable. With a bit of research and proactive planning, affordable car insurance for your teen is within reach.
At The General®, we specialize in providing car insurance for teenage drivers and others considered high-risk by insurers. Get quoted for a car insurance policy for your teen in under two minutes and see how much you can save or read more articles about safe driving on our insurance blog. Have a tech-savvy teen? They can download our mobile app and manage their policy conveniently from their smartphone.
