6 Ways to Save Money on Teen Auto Insurance

Getting a driver’s license is a major milestone for teenagers and a reason for celebration. Their parents, on the other hand, are likely looking at sleepless nights and sky rocketing auto insurance bills. Adding teenagers to a family’s insurance plan or getting individual auto insurance for a teenager with his or her own car can be extremely expensive.

If you are looking for low cost yet high value auto insurance for your teenage driver, type in your ZIP code into our search box, and we will send you insurance quotes that will calm your financial nerves!

According to MSN Autos, adding your teenage daughter to your auto insurance policy is likely to double your cost but if you have a teenage son, be prepared for a triple whammy! The gender bias emerges because of extensive research, which shows that boys drive earlier and more, besides being more aggressive behind the wheel.

However, with an increasing number of teenage girl drivers, insurance companies are slowly raising their rates too.

Whether you have a son or a daughter, you must make some strategic decisions or you will be left with a whopping auto insurance bill.

How Much Insurance a Teenage Driver Needs

Like adult drivers, most states require your teenage driver to get a minimum amount of insurance to protect them, in case of an accident. You should inform your insurance company when your teenager receives their learner’s permit. Given the limitations of the learner’s permit, most insurance companies will not charge you for your child or list them on your policy till they get their full-fledged driver’s license.

While every state has different minimum limits for liability insurance, experts suggest that you get as much coverage as possible. For instance, the Illinois Department of Insurance requires minimums of at least $20,000 per person per accident, $40,000 total per accident for bodily injury, and property damage of $15,000 per accident.

Regardless of the amount of insurance coverage you wish to get, make sure you do some research to lower your insurance bill.

Tip 1: Comparison Shopping

Most parents automatically add their children to their own auto insurance policy. While this might work well in many cases, it is important for you to shop around. Some insurance companies offer much more competitive deals for teenage drivers , as compared to others.

Just because your current insurance company has given you a great deal, it does not mean it will do the same for your child.

However, if you have a longstanding relationship with your insurance company, do not change your carrier to save a few dollars. Your longtime insurer will be less likely to raise your insurance rate or drop your coverage if your teenager is involved in an accident.

However, if you are not invested in your present provider, get a number of insurance quotes from online consolidator sites, insurance company websites, or from independent agents.

Do your calculations carefully before signing on with a new insurance company. Also make sure you check the insurance company’s financial condition and customer reviews to assure yourself of high levels of service and financial wherewithal.

You can look at the company’s financial health at A.M. Best. This is a trusted resource that rates companies based on their financial records including their assets and liabilities.

Doing your homework with respect to insurance rates and your state’s requirements will help you explain the nitty gritty of insurance to your teenage driver. Make sure you clearly tell your teenager that driving is a privilege in the United States. If you break the rules of the road, the legal ramifications are likely to be severe.

Tip 2: Discounts

Insurance companies are constantly offering different types of discounts to attract new customers while retaining those who are presently insured with them. So ask about what the insurance companies have on tap for teenage drivers.

Encourage your teenager to get good grades in high school and college. For most insurance companies, college students need to take at least 12 credits to qualify for a good student discount.

Insurance companies reward high grades with discounts as high as 25%.

Ask various providers if they have discounts for driver education programs. Some provide discounts if teens read specified driver safety books, or watch a recommended DVD and successfully complete related tests.

Make sure you get all discounts you are eligible for. From discounts for driving low miles, being a safe driver, to belonging to certain professions, insurance companies have a range of discounts for responsible drivers.

Tip 3: Get the Right Car

The right car makes all the difference. And that is true not just for your teenager’s social life! Insurance companies frown upon certain cars for teenagers, and charge an arm and a leg to insure them.

If you are planning to get your teenage driver a high performance car, a convertible, an SUV or a truck, be assured that your insurance bill is going to be enormous. These types of vehicles are seen as being high risk. Cars that have the ability to go from zero to high speeds within seconds are sirens for speeding.

SUVs are unwieldy and can be difficult for teenagers to control. Additionally, they allow a high number of passengers, which can be distracting for your teenage driver.

Similarly, if your child is going to drive your luxury car, your insurance is likely to rise. This is because luxury cars are expensive to repair or replace, making insurance companies hedge their risks rather robustly, at your cost.

You will find a plethora of comparative websites that will tell you about the best car for teenagers. But most experts agree that a late model four-door, four-engine sedan has all the safety features needed to keep your teenager protected. No matter what car you choose, check its safety ratings at the Insurance Institute for Highway Safety.

Tip 4: Stress Safe Driving

It is imperative that you talk about safe driving with your teenager. Not only will this go a long way towards keeping your child accident-free, responsible driving helps lower your insurance deductible.

There should be certain rules that should apply to every driver in your household and should be non-negotiable. Wearing your seatbelt as a driver and a passenger, no phone usage for talking or texting while driving, no speeding, and following all traffic rules should be made mandatory since these are legal requirements.

Make sure your teenager takes all the required driver’s education courses. Called Points and Insurance Saving Programs or Drivers Safety Courses, taking these state and insurance approved courses will help your teen become a safe driver while reducing your insurance bill.

Given the rising incidence of drinking and driving, you should talk to your teenage about the legal repercussions of getting a DUI citation, the high probability of accidents while driving drunk, and how it can change their lives. According to Mothers Against Drunk Driving, road accidents are the leading cause of death for teenagers and a third of them are alcohol related.

You should emphasize the importance of keeping a clean driving record. The fewer tickets and citations your teen receives, the better for your insurance bill.

Tip 5: Increase Your Deductible

Raising your deductible to at least $1000 will cut your premium significantly. If you can go higher without risking financial jeopardy in case of an accident, you should do so.

This will also restrain you from filing small claims that are likely to besmirch a claims-free record.

Make sure you and your teen drive very carefully so as to avoid any damage to your car. Keeping an eye on your teen’s driving habits and monitoring his or her time behind the wheel will help you sleep easier.

Increasingly, parents are also using GPS-based tools to track the movement of their teenagers, while they are driving. These tools are able to tell parents the location of the car, and to provide information about actions such as sudden acceleration, braking, speeding etc.

Finally, add to your emergency fund just in case there is an unfortunate accident. This will help pay your high deductible.

Tip 6: Drop Collision and Comprehensive Coverage

If you have older cars that are paid off and have lost a lot of their value, it makes sense to remove collision and comprehensive coverage. In some cases, you might be paying more in premiums for your old car than you can ever get back if it gets totaled.

Indeed, some insurance experts suggest that you might want to assign the old ‘clunker’ to your child and get separate insurance for him or her. This will keep the insurance on your newer, more expensive car from skyrocketing!

Buying Insurance for Your Teenager

Given the ease extended by the Internet, parents have many options for getting insurance for their children. While you search for optimum insurance for your new driver, make sure you also find other resources online that might help your child become a better driver.

If you need a quick and reliable resource for teenage auto insurance, type in your ZIP code into the FREE search box, and watch your screen fill up with as many options as there are demands on your teenager’s must-have car list!