Adding A Teen Driver To Your Insurance Policy? 5 Ways To Keep Costs At Bay

September 19, 2006 | By: | Comments (1) | Posted in: Auto

In our two-part series addressing teen drivers, last month we focused on safety tips for parents of teen drivers (as well as for teen drivers themselves). This month, we discuss the 5 proven ways of keeping your insurance costs at bay once you add your teen driver.

Fundamentally, the cost of a teen driver’s insurance comes down to earning good grades, maintaining a good driving record, managing deductibles appropriately, selecting the right car, and most of all: simply shopping around for the best policy.

1) Bs or Better = Discounted Rates
Most insurers will offer discounts (often from 10-25%) for teen drivers that maintain a B average or better. This could be seen as an incentive to your teenager to keep those grades up; tell them that if they dip below that B average, their driving privileges will be revoked!

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2) Clean Record = Level Prices
Unfortunately, the statistics don’t lie. According to experts, the crash rates for 16 year olds are approximately three times higher than those for 19 year olds, and nearly 6 times higher than for drivers aged 20-24. Many parents find that their new teen drivers are very cautious in the beginning, but then quickly become overconfident and start ignoring basic traffic rules and/or driving recklessly.

Your rates are going to go up when you add your teen driver; but that rate hike will pale in comparison to what they could be if your teen driver gets in an accident, or even gets just one traffic violation (such as for speeding or running a red light). Make sure you impart to your children the importance of driving safely, and remind them that driving is a privilege that can be easily taken away if they cause an accident or ignore traffic laws. Not only will a clean driving record help keep your insurance costs at bay, but it will also give you some peace of mind when your child is behind the wheel.

3) Higher Deductibles = Lower Premiums
Many people may know that raising their deductibles on their insurance policy can save them money, but most don’t feel the need to do this until they realize how much their insurance premiums are going to increase once they add their teen driver to their policy. InsWeb has always advised our consumers that they can achieve significant savings by raising their deductibles. However, all drivers on the policy must be careful not to get into accidents with that higher deductible, as this is the amount that will come out of your pocket before your insurance company starts paying for the rest of the covered damage. If you’ve raised your deductibles (for example from $250 to $1000), make sure to convey to your teen driver that accidents are now double whammies; you will have to pay a lot out of pocket and your insurance costs will then go up (usually significantly). However, if you can avoid any accidents, higher deductibles can afford you considerable savings.

4) Older Cars = Cheaper Insurance
While you might be tempted to buy your teenager a new car with all the latest safety features, remember that newer cars are more expensive to insure. If your insurance company lets you assign drivers to your cars, assign your teen (and have them drive) the oldest car on your policy. And to keep your costs down until you teen driver is older and therefore not costing you as much to insure, you and other drivers on your policy should consider not buying new cars. That way you can keep your premiums down for all the cars covered on your policy.

5) Up-To-Date Information And Shopping Around = Insurance Savings
Lastly, make sure you review your policy at least once a year to make sure all the information is up-to-date. For example, your rates could go down once your teen graduates from high school or turns 18. Or, if your college student does not have a car at college with them (and doesn’t drive when home on holidays), you could take them off your policy. Just make sure they are really not driving, because if your uninsured teen gets in an accident without insurance, that could really cost you.

Most importantly, before you add your teen driver to your existing policy, be sure to compare rates from several companies at InsWeb. Different companies will charge you different rates for adding the new driver, and your existing policy may not offer you the best deal.

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Good (And Bad) News: Your Teenager Is Now A Teen Driver

 

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