Blame it on lack of experience, reckless behavior, or youth, teen drivers figure into car accidents more than older drivers. With this trend, teen drivers are high risk to insure and this translates to higher auto insurance costs.
If your kid is to get behind the wheel soon, reducing the costs of insuring the car is inevitable especially if it’s you who’ll bear those costs. What are surefire yet practical ways to save money on teen drivers?
Let’s go over 10 best ways to drive down the costs of insuring your teen driver.Search for auto insurance quotes here.
Teen Drivers and Insurance Costs
According to the Insurance Institute for Highway Safety, teen drivers accounted for 7% of motor vehicle crash deaths in 2015. This is despite the fact that there were fewer teenage drivers compared to other age groups, the nonprofit group said.
Its Highway Loss Data Institute (HLDI) shared the following 2015 data on its web site:
“In the United States, the fatal crash rate per mile driven for 16-19 year-olds is nearly 3 times the rate for drivers ages 20 and over. Risk is highest at ages 16-17. In fact, the fatal crash rate per mile driven is nearly twice as high for 16-17 year-olds as it is for 18-19 year olds.”
10 Best Tips to Beat Your Teen Driver’s Insurance Costs
In 3, 2, 1, here are the most effective ways to deal with your insurance costs as your teenager gets his/her permit to drive.
1. Adding your child to your existing policy.
Adding your teen son or daughter to your insurance policy saves you money. This is because you will be paying one premium instead of two if he/she were to have a separate policy. In addition,
- The teen driver will become a secondary driver, which is less costly to insure.
- A parent’s driving record can partly make up for child’s driving record.
- Your insurance policy might have discounts that your child’s policy might not have.
2. App the monitoring.
Thanks to telematics, insurers can monitor a driver’s every brake, acceleration and mileage through a device plugged under the car’s dashboard.
Under this usage-based insurance system, good driving behavior equals to a monthly premium discount. Not only that, you get to monitor your child’s driving performance.
3. Automatic discounts are up for grabs.
Raising your deductible effectively lowers your monthly premiums. The Insurance Information Institute defines deductible as the amount you pay toward an insured loss.
Supposing you have a car accident, this amount is deducted from your insurance claims. Be sure you have funds safely hidden somewhere to cover for this deductible.
Another way is by installing anti-theft devices in your car. This lowers the risk of the car being lost or stolen and lowers the premium in turn.
4. Avoid buying a new car or at least hold on to the car(s) you have.
Buying a new car means another insurance contract. With a teenager behind the wheel, expect the premium to be high. Do you know that male drivers cost more to insure than females?
You can have your teen drive your old car and be added to the list of drivers on the policy, as noted above. Sharing a car also limits their driving time, a good prevention against possible accidents resulting from reckless driving.
5. A used car that is safe and affordable, if you intend to buy for your teen driver.
If buying a car is within your budget, IIHS recommends used cars. Not only are they affordable to purchase (you can buy one for $4,000), but they are also cheaper to insure.
Together with affordability, the nonprofit organization recommends that you look into the safety features of the car as well. Here are their top tips for shopping used cars for your teenage driver:
- Examine the car’s crash test rates. The car with the highest rating within your budget is a go. You can look up its safety ratings on the National Highway Traffic Safety Administration’s website. Ideally, the car should have 4 or 5 stars overall based on the NHTSA’s old rating system used on 2010 car models.
- Look for electronic stability control – this feature helps a driver maintain control on slippery roads and curves.
- The bigger, heavier the vehicle is, the safer it is. Small SUVs that weigh as much as a midsize car, midsize SUVs, minivans, and pick up with these models are a good starting point.
- The engine does not have to be powerful, having a base engine is okay.
- Check for recalls at nhtsa.gov/recalls.
A safe car with features and ratings as proof lowers auto insurance rates for teen drivers. You can even earn further discounts for a fuel-efficient car or low mileage use.
6. A teen driver’s discount points.
Certain insurers reward students with good grades in the range of A- to B- with discounted premiums.
Other insurance companies give discounts to teens who leave their car at home while attending university. The school must be 100 miles away from home and that the student will only drive the car during school breaks or weekends.
7. A safe driver is lower to insure.
Teen drivers can enroll in safety courses that focus on driving responsibly, including making appropriate judgment calls. These programs complement with their respective state’s graduated driver licensing that has been proven to reduce teen crashes and deaths.
The GDL program has three stages: (1) learner’s permit, (2) intermediate license or provisional license, and (3) unrestricted license.
As teen drivers become independent, graduating from a learner’s permit to an unrestricted license, they also become less risky to insure and get discounts for taking extra driving courses that should be accredited by the way.
8. An increase in liability is an increase in your financial protection.
Liability in auto insurance comes in when the driver – you, your spouse or your child – damages property or bodily harms someone. Basic auto insurance carries bodily injury liability and property damage liability.
It’s wise to expand this liability, e.g. a $1 million additional liability coverage on top of your basic liability coverage, in case your teen driver is involved in an accident that could result in a lawsuit and affects your finances. Your liability coverage will cover these legal costs and medical expenses arising from the accident.
9. Auto insurance can be bundled with other policies for discount purposes.
One insurance company, for instance, offers discounts of up to 25% on multiple cars. Other insurers give multi-policy discounts in the form of premium discounts across all policies.
10. A good insurance rate is found when you shop around.
What if you are paying double for the same coverage that can be obtained for less from another insurer?
Sometimes loyalty doesn’t count. Shopping for auto insurance rates among several insurers remains the best possible way to weigh the costs of getting one. Always ask them about what they can give you in terms of discounts and coverage and what it will cost you in terms of rates and deductibles.
At some point, your teenager will have his/her own good driving record and have the means to pay his/her own insurance policy. Until that happens, you can support their auto insurance policy without costing more than what’s necessary.Click here to see the latest rates.