How to Save Money on Teen Driver Auto Insurance


For many teens, a driver’s license represents freedom and greater independence. For parents, a young, newly licensed driver can not only cause significant anxiety, but also a shocking increase in car insurance costs.

I almost fell over when I opened the first car insurance bill after adding my 16 year old daughter to my policy. It was literally double the previous month. I was sure it was a mistake. Maybe I forgot to pay the previous month’s bill? I immediately called my agent, who couldn’t offer much reassurance. That’s right, he said. Add a teenager to your policy and your premium will skyrocket.

“Insurance is about risk, and rates are based on many factors, including who you are, where you are, what you drive, and how you drive,” says Allie Byers, spokesperson for the website. The Zebra insurance comparison.

For most insurers, “who you are” includes age, which is an important factor in determining an auto insurance rate.

“Because teenage drivers are much higher risk than adult drivers, with higher risks of car accidents and fatalities on the road, their car insurance premiums will be much higher,” says Byers.

We all have to start somewhere, but given this lack of experience, drivers up to age 25 (or their parents) can expect to pay 115% more per year than the average driver – $1,667 per policy six months, versus the US average of $774. – according to a study conducted by the insurance comparison site, The Zebra.

The good news is that parents and teens have the opportunity to save on teen car insurance rates, says Byers, who suggests shopping around first.

“You might find that you could pay a lot less for the same font or an even better font,” says Byers.

Also ask your agent to apply any applicable discounts. I was able to reduce my premium by a few percent by signing up for an automatic payment plan through my provider.

Here are more tips to help you save, courtesy of The Zebra.

Keep your teen on your car insurance policy: Auto insurance is even more expensive for teenage drivers on their own policy. Parents who choose to insure their teen as part of their policy will typically save about $955 every six months compared to a stand-alone policy with the teen driver.

Good student discount: If your driver has good grades – usually a B average or better – ask about a good student discount. Nationwide, Progressive, Geico, All State and others offer various student discounts. State Farm-insured students can save up to 15 percent by enrolling in the company’s Steer Clear program. In all likelihood, your insurer will require routine proof, such as a transcript, in order to qualify.

Defensive Driver/Safe Driving Discount: These programs can not only help teach teens how to be safe drivers, but also reduce the potential for citations and accidents that can increase your premium. In New York, you can save 10% on your premium for three years if you take a state-approved course. The exact requirements and specifications for this discount vary, so check with your insurance company for details to get a cheaper rate.

Choose a safe and moderately priced vehicle: Insurance companies consider both the driver and the car when determining insurance rates. If you want to lower your premium, consider a less expensive vehicle, such as a used car, with a good safety rating. New vehicles, trucks and luxury brands will cost more to insure.

Monitor their conduct: If your teen is a good driver, consider asking your insurer for usage-based insurance, such as telematics, a tracking device that monitors driving habits and trends, which helps determine insurance premium. policyholder’s automobile.

Consider additional coverage options: If you are not completely convinced of your teenager’s driving abilities, you may want to consider what is called accident forgiveness in your policy. Although it varies by insurer and your state, it would “forgive” the first accident on your insurance policy – meaning your rate wouldn’t be increased just because you were in a car accident. Note that not all insurance companies offer this protection and there may also be age and location restrictions. The Insurance Information Institute also suggests increasing your liability limits if you add a teen driver to your policy, as this can help protect you from lawsuits or damages that could occur if your teen is involved in an accident.

Don’t pay for coverage you don’t need: If your new driver will be using an older vehicle, make sure you’re not paying for coverage you don’t need. Collision and comprehensive coverage is only designed for leased or financed cars, or vehicles valued over $4,000. Compare the cost of repairs out of pocket with the cost of comprehensive and collision insurance to see if dropping those coverages seems worthwhile.


Comments are closed.