There’s a secret among the ranks of auto insurance providers that you might not be aware of. Okay, it’s not really a secret—at least not by definition. Because something is not commonly known doesn’t automatically mean that someone (i.e., your car insurance provider) is trying to keep it hidden from you. But the fact that so few parents actually know there are steps they can take to lower the cost of their teenager’s car insurance certainly makes it seem that way. Here are two effective ways to accomplish that end.
- Raise your deductibles. You’re probably thinking it makes a lot more sense to keep your deductibles low, especially during your teenager’s formative driving years, to cover for the high risk of incidental damage. But raising your deductible can have a seriously diminishing effect on the insurance premium that you pay out, and could work to counterbalance the strain of taking a teenager onto your family policy. As a rule of thumb, you should never raise your deductible so high that you won’t be able to pay it if something does happen.
- Insist on a used car for your teenage driver. New cars cost a lot more to insure, and when you throw a young driver into the mix, you’ve got a financially crushing combination. A used car will help lighten the economic load and will also go a long way in teaching a teenage driver a few lessons in humility, as well as the value of the dollar. That said, it’s critical to your child’s safety that the used vehicle is equipped with all the necessary safety features. The last thing you want to do is compromise your teenager’s safety for the sake of a few saved dollars.
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.
It’s the day your teenager’s been waiting for, whether you’re excited or not. The smile says it all: a new driver’s license has been issued to a member of your family. And while your teenager eyes your car keys, all you can think about is what’s going to happen to your car insurance premiums.
Even if your teenager is the most careful kid in the class, statistics don’t lie. The Insurance Institute for Highway Safety recently published a report that showed that 16-year-old drivers are involved in accidents six times more often than drivers in the 30 to 59 age group. Knowing all this, it’s clear why insurance companies pump up the premiums for teenage drivers. Before your policy skyrockets 50, or even 200 percent, it’s helpful to know that you can get up-to-date information about adding a teenage driver to your car insurance policy.
Nowadays, there are a few trustworthy companies like AgentInsure that can immediately put you in touch with a licensed insurance agent in your area who can inform you about the different insurance policies and provide you with the best advice for your family. You can ask your insurance agent whether it’s better to add your teenager to your policy, or apply for a new one. In addition, your agent can also tell you about other money saving opportunities, such as enrolling your teenager in a certified driver education course. Most importantly, set the example and always take an interest in your teenager’s driving habits.