Auto insurance for teen drivers
Do you have a new licensed driver in your home? Reduce stress by understanding the implications for your car policy
For parents, the excitement of having a driver for the first time at home is usually a mood of anxiety. With less driving experience, immature drivers are more at risk for accidents. Of course, safety concerns are high on most parents’ minds but other stressors – such as the high cost of insuring your new driver and the financial liability of teenagers in driving accidents – can be alleviated through these measures.
Before getting a learner’s permit, consult your insurance professional
Your agent or agent can clearly explain the costs involved in insuring a teenage driver. The good news is, insurance rates will go down as you get older – if you have a good driving record. That’s it.
Involve your teenager in car insurance discussions
From the beginning, it is important to talk to your child about the relationship between driving costs and attendant responsibilities, including insurance costs. Explain and reinforce the serious consequences of driving violations or accidents, including driving safety tips and insurance costs.
Encourage positive behavior
Auto Insurers offer discounts or lower premiums:
Students who maintain at least a “B” average in school
Adolescents who take a recognized driver training course
College students who go to school at least 100 miles from home and do not bring their car to campus
Choose the right auto insurance company
Adding teens to their auto insurance policy is usually less expensive for parents than buying their own insurance policy for teens. By insuring your teen’s car with your insurer, you may also be eligible for multiple vehicle discounts. That said, insurance companies differentiate between pricing policies for young drivers, so do some research on pricing to find the best fit for you and your teen.
Assign your teenager to the right car
Find out how your insurer hires a driver for the car — Some insurers will assign a driver to insure the car for the most expensive (usually teenage) car that is the most expensive to insure. If possible, assign your teenager to the least expensive car.
Note that there can be no exceptions to this type of arrangement; Your teen should only use the car where he or she is assigned, even in an emergency. If your teenager is involved in an accident with an unscheduled car, fines may be imposed and your own premium may increase.
Increase your liability insurance for greater protection
If your teen gets into an accident, the state minimum amount for liability insurance will not be enough to fully protect you from litigation. Consider buying more liability coverage — If your teen is negligent in an accident and the damages exceed your insurance limit, you may be liable financially and may be sued in court for an amount not covered by your insurance. Depending on the value of your financial assets, you may want to seek additional protection that provides a personal umbrella liability policy.
Increase your deductible to save your premium
The more deductible you have, the more money you can save on your premium, so consider increasing your deductible from the minimum amount required. You may want to use those savings to increase your liability insurance.