Insuring a Teen Driver

Auto insurance is a part of life, and a costly one at that. But parents of teenagers have several reasons to be concerned when their teens reach driving age: Teens are among the most expensive drivers to insure, and they can double or even triple a family’s auto insurance premiums. Depending on your state’s laws, your insurance carrier and your policy, your teen may be automatically added to your policy when he/she reaches driving age. Make sure you know how your teen may affect your policy, and consider seeking competitive quotes from different insurance companies to verify that you’re getting the best coverage for the money. Before your teen reaches driving age, be sure to review these facts and tools to be prepared for their driving days.

Facts About Teen Drivers

• According to the National Association of Insurance Commissioners, one-third of deaths of people ages 16 to 20 is due to automobile accidents. More than 5,000 teenagers die in auto accidents each year.
• Younger drivers are even more dangerous: 16-year-olds are in almost three times as many accidents as are 19-year-olds.

Ways to Save on Your Teen’s Driving Premiums

While it’s estimated that your auto insurance premiums could double –if not triple – when your teen is added to your policy, don’t give up hope. There are some ways you may be able to find savings. They include:

• Your existing cars could be part of the problem. If you own a sports car and you add a teen driver, your premiums are likely to skyrocket. A modest sedan – an economy car – is likely to not be as costly overall.
• Grades do matter. If your teen is an honors student or if he/she has taken a driver’s education class, you may be eligible for discounts on your premium. Teens who are successful students are generally considered a lower risk for insurance companies.
• Be accurate in your application. Your premium will be based on a number of factors, including the make and model of your existing cars.
• The features in your teen’s vehicle could save you money as well. Features such as anti-theft devices, airbags and other safety equipment could result in lower premiums.
• If you raise your deductible, your premium will go down. Of course, this means you will pay more money out of pocket in the event that you have an insurance claim.
• Go over your options with your insurance company before renewing your policy. This also might be a wise time to consider shopping around for a new policy: If you seek out competitive quotes from multiple insurers, you can often find areas for savings.

Strategies You Can Employ

To keep your teen safe on the road, you may want to consider using these strategies in you household:

• Limit the number of hours your teen can drive per week
• Limit the number of passengers (friends) who can be in your teen’s car
• Limit the number of miles your teen can drive per day or week
• Ask your teen to sign a contract acknowledging the family rules related to safe and responsible driving practices