How To Save Money On Car Insurance For Teens: 7 Useful Hints
Teen drivers between 16 and 19 are more likely to be involved in a fatal crash than drivers 20 and older, with a risk of almost three times as high per mile driven.
That’s a scary statistic for parents. For insurance companies, it’s a costly statistic.
The increased risks of serious crashes make car insurance rates for teens much higher than adults.
You’re going to pay more once you add a teen driver to your policy, but you can learn how to save money on car insurance for teens to make it more affordable.
Take these steps to keep your car insurance rates lower.
1. Pick the Car Carefully
Many parents focus on the fact that they’ll have a teen driver, but did you know the vehicle your teen drives affects the rates? The safety rating of the vehicle is a big factor in how expensive insurance is for it.
Buying your teen driver a zippy sports car will likely increase your insurance significantly more than a modest, safe car. Plus, you’ll feel better with your new driver in a vehicle with plenty of safety features and good crash-test ratings.
Before you buy your teen a car, contact your insurance agent for quotes. The agent can give you an idea of how different models of cars will affect your rates.
2. List Your Teen as an Occasional Driver
Listing your teen driver as an occasional driver on your vehicles instead of buying your teen a separate vehicle can keep rates lower. Since your teen doesn’t have a dedicated vehicle and doesn’t drive as frequently, it’s a slightly lower risk for the insurer.
Most companies will only do this if the number of drivers listed on your policy is higher than the number of vehicles you insure. That means if you have three vehicles and three drivers, this option won’t work.
Some companies also reduce the rates if your teen is away at college without a vehicle. Your teen still needs coverage during that time, but your costs may go down since your student isn’t driving frequently
3. Shop Around for New Insurance
If you don’t make it a habit to shop around periodically for new insurance, now’s the perfect time to do it. Even when you don’t have a teen driver on your policy, checking with different companies regularly can save you a significant amount.
You have an extra incentive when you have a teen driver, though. Some insurance companies charge more for teens than others.
If you’ve always been with the same company, the rates may be great for you. But they may not go so easy on your teen.
Check with an independent insurance agent who does business with multiple insurance companies to get multiple quotes at once. Look at different agencies and insurance companies to find the best rates.
Once you settle on the cheapest rate, don’t get too comfy. You may need to continue shopping around your insurance periodically to continue finding the cheapest options. Since rates change all the time, the company that’s the cheapest now may not still be the cheapest option for you next year.
4. Ask for a Good Student Discount
Hitting the books can help with more than college admissions. Many car insurance companies offer good student discounts for teen drivers. The discounts vary by company and may have different minimum grade requirements, but they often require at least a B average.
Ensure you’re getting all other possible discounts for your teen specifically and your policy in general. Multi-policy discounts shave off a little money if you put all of your policies with one insurer. You can also get discounts for anti-theft devices and other safety features.
Some companies use telematics, which are small devices that plug into your vehicle. They track how you drive, including your habits and vehicle usage. Insurance companies reward you with lower rates if you’re a safe driver.
5. Take Safety Courses
Driver education course requirements for teens vary by state. Some states require the course to get a license. Others don’t have any driver education requirements.
Taking the course even if it’s not required helps your teen learn better driving skills. Completing the course may earn you a discount on your car insurance because it reduces the risk.
Your teen may be able to take a more advanced driver safety course after taking basic driver education. This can help you earn a discount as well.
Check with your car insurance company before choosing a driving course to determine if you’ll get a discount.
6. Increase Deductibles
Increasing comprehensive and collision coverage deductibles can lower your car insurance rates. These coverages pay for repairs to your vehicle if it’s damaged in an accident.
Before the insurance pays for those amounts, you have to pay the deductible. A higher deductible means you’ll pay more if something happens, but you’ll save money over the long run if you don’t need the coverage.
If your teen driver has an older vehicle that you own outright, you don’t have to have comprehensive and collision coverage on it. Dropping those coverages completely can save you significantly.
Just keep in mind, your policy won’t pay for any repairs for the vehicle. If it’s a nicer vehicle, it may be worth it to have that coverage. Check with your insurance agent to decide if you should drop those coverages.
7. Don’t Skimp on Liability Insurance
Liability insurance is required for drivers, so you can’t opt-out of it. And you shouldn’t want to. Liability insurance protects you if you cause an accident.
You can choose your liability limits, from the minimum to much higher. It may seem tempting to choose the lowest liability limits allowed by the law. But that’s likely also a mistake, especially with a teen driver.
The minimum liability requirements won’t likely cover the financial burden of a serious accident. You can be held financially responsible for any remaining costs once you max out your policy limits. With a teen driver on your policy, you have an even higher risk of an accident that’s your responsibility.
You usually don’t save much by going with the lowest liability amounts, but you open yourself up for significant financial difficulty if something happens. Keeping your liability coverages high provides you with more protection.
How to Save Money on Car Insurance for Teens
Figuring out how to save money on car insurance for teens takes a little work. The effort is worth it for a reduced car insurance rate and the coverage you need.
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