It’s every parent’s worst nightmare: insuring a teenage driver. Most people fret over the potential financial impacts long before their children have even exited the diaper stage, and rightfully so. The cost of teenage auto insurance can be outlandish. Nobody’s blaming the insurance companies—statistics drive the rates. But you’re not entirely helpless, either. There are some things you can do to lower the astronomical rates you’ll be asked to pay, if not dramatically then at least incrementally.
Everyone knows that a passing grade in their DMV driver’s test is a prerequisite of obtaining their license in the first place. If it weren’t, there would be a lot less frayed nerves at the dreaded “moment of truth,” and a lot more bad drivers on the road. But did you also know that maintaining high grades in the classroom can impact your teenage auto insurance premiums?
Auto insurers offer discounts to “good students” that range from 10 to 25 percent. This may not sound like much, but when you consider being able to save almost ¼ of the high cost of insuring a teenage driver, you begin to see dollar signs in your field of vision.
Most insurance companies consider a B average to be the dividing line between “good” performance and “substandard”—and although achieving high grades doesn’t automatically make someone a good driver, insurance companies consider kids who are able to balance their school life with their social life to be far lower risks.
Tip: Talk to your insurance company about good student discounts. Then have a serious talk to your teenager about what you’ll be expecting of them if they want to keep their driver’s license.