Cost-effective ways to insure a teenage driver
Becoming licensed to drive is a high priority for most teenagers. Driving a car fulfills their need to transition from child to adult, sort of. Unfortunately, with all the cars on the road today, teenagers are “accident prone.”
Accident statistics paint a graphic picture
Our future leaders have a woeful driving record when they’re first licensed. Their inexperience behind the wheel and on the roadways appears to result in disturbing numbers of auto accidents.
A troubling statistical example: Auto accidents are the leading cause of death in young people ages 15 through 20. Another statistic displays the value of more maturity and driving experience: 16-year olds are three times more likely to have an auto accident than 19-year olds. Teenage drivers age 16 are involved in around 35 accidents per million miles driven, while 19-year olds get into approximately 12 auto crashes per million miles.
These results – and many other statistics – generate increases of 50 percent to 200 percent in your insurance premiums the moment you add your teenage driver to your auto policy. When you compare insurance quotes, you may suffer “sticker shock” at first. Auto insurance rates spike regardless of your own stellar driving record, insurance company, or coverage levels.
While it still makes sense to compare auto insurance rates to find the best option, all major companies base their insurance quotes on these statistics. Even if your teenager appears to be more focused, careful, and conservative than his/her peers, you will pay a steep price for the first driving years. You can, however, save some money with auto insurance quotes by learning the conditions that lower premiums.
How to reduce the cost of insuring your teenage driver
Learn how your insurance company matches household drivers and autos.
This factor could save you or cost you hundreds of dollars per year. If you have two cars and three drivers, your insurance company may or may not assign your teenager as the driver of the more expensive auto. Insist that your child be assigned to the less expensive (to buy AND repair) car. Tell them that he/she is not permitted to use the new Jaguar, but must drive the 6-year old Ford. In some cases, it’s cheaper to buy your teenager an old “beater.”
Be sure your teenager completes a “Driver’s Ed” course.
You should save between five percent and 15 percent, even though statistics don’t indicate that these courses reduce the volume of teenage accidents.
Strongly urge your teenager to maintain a “B” average in high school.
Many insurers offer “good student” discounts of 10 percent up to 25 percent. Once again, statistics indicate there is little difference with accident incidence for honor roll students. Yet, many insurance companies believe that these teenagers will grow to be better long-term risks after they mature.
Consider increasing your deductibles.
Auto and home insurance quotes often vary widely depending on your deductible amount. While it’s risky to increase your deductibles, it may be cheaper in the long-term if your new driver steers clear of major crashes. Evaluate the probable risk of a serious accident against the dollars you may save when you compare insurance rates.
When Junior is away at college and without a car, take him off your policy.
After you say, “Goodbye,” to your teenager as he/she leaves for college, you next action may be to remove him/her from your auto policy, dramatically lowering your insurance rates. You want to be sure, however, that Junior isn’t driving his roommate’s Corvette around campus.
Learn to love “previously owned” automobiles.
While everyone loves the safety and features of new cars, the costs to insure many models are another source of insurance quotes shock. You can often save hundreds of dollars per year matching your new driver with an older vehicle.
Consider not reporting small “bumper thumper” incidents.
Simple parking lot scratches or “fender benders” may be better handled by simply paying for these minor repairs yourself. Of course, your insurer wants you to report every touching between your auto and another, so they can increase your premium. However, you can pay for a simple shopping cart micro-dent without adding an “incident” to your family driving record.
While it is impossible to avoid the statistics used to set auto insurance rates for teenage drivers, you can lower your annual cost by taking one or more of these suggestions. Auto insurance rates work totally opposite life insurance rates for young people, for obvious reasons.
You must therefore stress safe and defensive driving to your teenager. While you shouldn’t expect perfection – accidents happen, that’s why they’re called accidents – teaching your teenager about the critical importance of safe driving will save you money.