Reducing Car Insurance Costs for Teens

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October 22, 2018 by middleearthnj

Teenagers learning to drive is a rite of passage and can definitely be an exciting time in their lives. It can also be a very stressful time for parents, who are worried about their teen’s safety and surprised by the cost of insuring them!

Teen Driving Safety Statistics

Teens are very expensive to insure because they are at a high risk for motor vehicle crashes. Consider these facts:

  • One in five 16-year-old students will have an accident in their first year of driving.
  • The risk of car crashes is higher among 16-19-year-olds than among any other age group.
  • Per mile driven, teen drivers are nearly three times more likely than drivers aged 20 and older to be in a fatal crash.
  • Six teenagers (age 16-19) die every day from motor vehicle injuries.

The absolute best way to keep your teens safe in a car is to prepare them as best you can while they have their learner’s permit. Please check out our previous blog, 8 Tips to Teach Your Teen to Drive. In addition, because of their high likelihood of getting in an accident, it is very important to get them included on your car insurance policy.

Car Insurance Pricing

When your teen first gets their learner’s permit, it’s time to contact your insurance company. Each company handles teen drivers differently, but most of the time, you will need to add your teen to your insurance policy. Knowing your teen is properly insured can give you a little piece of mind, but it can also give you sticker shock! Because teen drivers are so high risk, they are the most expensive to insure. Here is what you need to know to get the best price for insuring your teen:

Get a used car for your teen to drive. Some cars cost more than others to insure. Obviously, it costs an insurance company significantly more to repair a new luxury vehicle than an older used car. Newer safety features also impact a car’s insurance rate, so getting a car with good safety will not only protect your teen but should reduce your insurance payment. Insurance companies use past claim data to determine which vehicles get into more accidents, and which ones have higher payouts for each accident, so you should consider doing a little Internet research to determine which vehicles cost the most to insure and avoid those.

Assign a car to your teen. If your household has a 2018 Lexus, a 2011 Civic, and a 2002 Pontiac, your insurance company automatically assumes that the teenager is driving the more-expensive Lexus, and they’ll charge accordingly. Find out if your company will assign cars to specific drivers. If they do, make sure your teen is assigned to the car they are actually using.

Keep your teen on your policy. It is typically less expensive to add your child to your policy than for your teen to purchase his/her own insurance.

Celebrate good grades. Most insurance companies offer a good student discount, so your teen will cost less to ensure if he/she earns good grades. This is because statistics show that teens who get better grades in school are less likely to get into a car accident, reducing their risk. You typically have to show proof that your teen maintains a 3.0 grade-point average or higher or made honor roll the previous semester.

Take a driver’s safety program. Sometimes insurance companies will lower your premium if your teen takes a special driver’s safety program. Ask your insurance company if they offer this type of discount.

Increase your deductible for certain types of coverage. You’ll pay lower premiums by increasing the amount you’re willing to pay out-of-pocket if the car is damaged.

Send them to college without a car. If your teen heads to college without a car, the insurance company will drop your premiums significantly because your teen, by that time, is a more experienced driver, and the company is really only covering your teen’s driving when they are home on break.

Shop around for the best policy. Not every car insurance provider offers the same rates. When you are adding a teen on to your policy, it is worthwhile to get quotes from multiple companies to see which one is best for you and your family.

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