This year, some two million or more teens will start driving for the first time. If one of these teens is yours, expect your family insurance rates to go up dramatically. Why? Because insurance companies say that teenagers are involved in an accident twice as often as their adult counterparts.
Although your insurance costs will increase when your teen starts driving, it can lower premiums by approximately 10% or more. One way to do this is to list your teen as an “occasional driver.” The main driver is the one who drives the car the most. Any other driver is considered an occasional driver, which in turn can result in a significant discount. However, if you have more cars than the primary drivers, your teen can be claimed as the primary driver of one of those cars.
Another money-saving tip is to specify your teen son or daughter as the driver of an old used car and drop collision coverage for him or her. This action will also reduce your costs. Also, because teens with very good grades are generally good drivers, many major insurance companies offer discounts of about 10% for such students. Also, insurance companies don’t check frequently every semester, so a single honor roll appearance can often apply over multiple years.
Having your teen take and successfully complete a driver’s education course could also help reduce costs. Experts at the Insurance Institute for Highway Safety have reservations about the effectiveness of driver’s education for young drivers. However, while some believe that driver’s education does not necessarily reduce a new driver’s risk of being involved in a car accident, it can definitely help reduce a teen driver’s auto insurance rates.
Some states require insurance providers to offer discounts for teens who complete driver training courses. In fact, parents can save about 10%, so it’s obviously worth asking. Deductions of up to 5% are also offered if your teen driver is in college without a car. Typically, your son or daughter must be at least 100 miles from home (and their cars, too) for them to qualify for this discount. However, the fee reduction is good all year long, not just during your child’s academic year.
Saving money on insurance for teen drivers is important, but making sure they’re safe on the road is even more important. Fortunately, there are some steps you can take that can do both. In terms of both safety and premium prices, buying a teenager a top-of-the-line new car is asking for trouble. A bigger, older car would help protect your novice driver and lower premiums. You might consider buying government vehicles, which are usually auctioned off on a regular basis. They can be boxy and a bit dull, but are generally well-maintained.
Another cost-saving tip is to wait a year or so before letting your teen get behind the wheel. The odds of safety improve dramatically with age and maturity. This fact, in turn, helps reduce your premiums.
Yet another tip is to set a nighttime driving curfew, since driving at night is much more dangerous than during the day. This way, your teen will gain driving experience during the safest daylight hours; not to mention, it will also save you a lot of late night worries.
Money-saving tactics that work for all types of drivers are especially helpful when you suddenly have to insure a teen driver. For example, the simplest step is to search for quotes online. Prices for the same insurance coverage can vary widely, sometimes by as much as 50%, between different insurance companies. This means you could cut your insurance costs in half simply by comparing offers from different companies.