It can seem terrifying to hand over your car keys to your teen that just got their license, and for a good reason. That’s mainly because teen drivers are inexperienced and may get distracted easily on the road, which can cause them to get into dangerous accidents. A report from GEICO states that every 1 in 5 teen drivers will get into an accident at some point in their first year of driving. The Insurance Institute for Highway Safety (IIHS) backs that up with a report stating that teen drivers are four times more likely to be in an accident than older drivers.
You’re probably more worried about the safety of your teen rather than how much your premiums will rise when your teen gets into a road accident. However, when you do add your teen to your insurance policy, you will be in for a surprise. That’s because teen drivers, especially young men, are the most expensive people to insure.
That’s why you must take measures to ensure that your teenager is properly insured, which will give you peace of mind and allow you to save some extra cash on your insurance premiums as well. So, here are the most important things you should know about auto insurance for teen drivers.
1. Assign Your Teen A Car
Some cars will cost you more money to insure than others, mainly because it is more expensive to replace or fix parts of luxury vehicles or imports. Ensure that your teen isn’t driving the most expensive car you own, as that will mean your insurance premiums will rise. Not every insurance company will assign cars to specific drivers, and you should check if yours does.
2. Teens Don’t Need Their Own Insurance If They Have a Learner’s Permit
The first thing you should do when your teen driver gets their learner’s permit is informing your insurance company because the laws vary from state to state, and every company handles situations differently. Some insurance companies may claim that you shouldn’t add your teen to your insurance policy, but we recommend you add them to your policy because the chances of your teen getting into an accident are too high.
Your teen will need to have their own insurance by law, whether in a separate policy or as a part of yours, when they get their full-fledged driver’s license. If the car they are driving is under their name, they will need to get an insurance policy of their own.
3. It’s Smarter to Keep Your Teen on Your Policy
If you’ve got an acceptable insurance policy, it makes sense to add your teen to your policy as it is less expensive than having them buy their own insurance. However, you must remember that if your teen gets into an accident, that will raise your premiums. If you don’t want that to happen, you should get your teen their own insurance policy.
You should check the rules first when doing that, as some states require that you co-sign for insurance coverage, even if your teen has a separate insurance policy.
4. Your Price Tag Will Decrease with a Used Car
When buying a car for your teen, the best course of action is to get them a used car. They may not be best pleased about this, but you should explain rationally why this makes sense. You don’t want to get them a car that doesn’t have basic safety features, which is why you should get a mechanic to conduct a thorough inspection of the vehicle before you buy it to ensure it is reliable and safe.
Driving a car that has excellent safety ratings will also lower your auto insurance policy costs. When buying a used car, make sure that it has safety features like anti-locking brakes, anti-theft devices, and airbags, as these can all contribute to lowering the premiums.
5. Skip Collision and Comprehensive Coverage
The law doesn’t require you to get collision and comprehensive coverage, and so it makes sense to skip these coverages. If the deductible is worth more than the car your teenager is driving, it doesn’t make sense to pay those premiums. The insurance payout isn’t going to cover the premiums you have paid if your teenager completely wrecks the car in an accident. You should first check with the insurance company to find out if you need collision and comprehensive coverage.
6. Inspire Your Teenager to Get Good Grades
Your teenager can take advantage of the good student discount, which means that if they earn good grades in school, it will cost you less money to insure them. The amount you save is different for every state. Statistics have shown that teenagers who score good marks in school are good drivers as they get into fewer accidents. It means these students are not less likely to get into an accident, and therefore, you will have to pay less for your car insurance.
Some insurance companies will offer you a discount till your teen gets into college. To qualify for the discount, you will need to show proof that your child has maintained a 3.0 GPA or a higher GPA, or if they have made the honor roll or the dean’s list. You will also get a discount if your teen has passed an approved driver’s safety program.
Make sure that you invest a lot of time when shopping around for the best insurance policy for your teen. Not every car insurance company will offer the same rates, so get quotes from multiple companies to find one that is best for you and your family. It would help if you also encouraged your teen to practice safe driving when on the road, which means no texting or talking on the phone when driving, and always obey traffic laws. If your teenager is a safe driver, it will lower your insurance premiums and allow you to find the right auto insurance for your teen driver.