It’s that time. The time where you either start panicking or breathe a massive sigh of relief. Your teen is about to get a driver’s license.
Now, if you’re in the former category, you’re probably scrambling to figure out what kind and how much insurance you need to cover your kid AND what type of car they should drive to stay as safe as possible as they learn the ropes.
If you’re in the latter category, you’ve been waiting for this moment for years. You’re ready to let your teenager drive to school, sporting events, friends’ houses, and other activities so you don’t have to act as chauffeur anymore.
Before your teen gets behind the wheel, they need the right car insurance so they’re protected in case they get into any kind of accident. And teenage drivers are four times more likely to crash than drivers 20 and older. Not to mention, it’s illegal to get behind the wheel of a car without coverage.
Auto crashes are also the leading cause of death for teens in the U.S. That makes them riskier to insure, so—you probably guessed it—insurance companies charge higher premiums for teens than for adults.
In this article, we’re covering a few essential factors you should consider before buying car insurance for teenagers:
- Whether you should combine your policies or keep them separate
- How to find affordable car insurance for teenagers
- What types of cars are best for teens
- How to lower your teen’s car insurance premiums
Adding Your Teenager to Your Insurance Policy vs. Taking Out a New One
In general, it’s much more cost effective to add your teenager to your auto policy versus taking out a separate policy. In fact, for full coverage, teens and parents can save an average of over $3,000 a year by sharing a policy.
That doesn’t mean it’s going to be cheap. Adding your teenager to your insurance policy can cost you anywhere from 140% to 160% more than what you’re paying now.
That may sound like a lot—and it is—but there are various ways to save more on your premium if you know what to ask and where to look. And every year your teen keeps a clean driving record, the lower your premium will fall, which is an excellent incentive to drive carefully (especially if your teen is paying for their own insurance).
On the other hand, if your teenager gets a speeding ticket for driving 11 to 15 mph over the limit, the average premium will rise by $692 per year (compared to $209 per year for an adult). If your teen gets a DUI, their car insurance can increase $2,398 per year, on average (compared with $813 for adults).
Those are some severe insurance hikes. Depending on which state you live in, your teen may also have their license suspended, be fined, be required to do community service, or even face imprisonment. In other words, teen DUIs are no joke.
Compare Insurance Quotes
When your son or daughter becomes street legal, your insurance carrier may proactively contact you and ask if you want to add them to your policy. If they don’t, be sure to let them know so you can weigh your options.
It’s a good idea to start this process early so you can take your time comparing policies, pricing, and various coverage options. Doing so can potentially save you a lot of money.
The Best Cars for Teens
Buying a safe, used car can save you or your teenager money on insurance. The best cars for teens, according to the Insurance Institute for Highway Safety, meet the following criteria:
- Lower horsepower (to discourage speeding)
- Larger, heavier vehicles (for safety)
- High crash-test ratings
- Electronic stability control
- No outstanding recalls on the vehicle
How to Save on Car Insurance for Teenagers
Here are several suggestions for your teenager to help both of you (if you take out a combined policy) save money on auto insurance.
Your insurance provider probably won’t offer you many of these discounts unless you ask for them proactively, so it’s good to keep a running list on hand. Applying these types of discounts can lower your annual premium significantly.
- Good student discount (for 3.0 GPA and above)
- Student away-at-school discount (if your college student leaves the car at home)
- Defensive driving discount (applied after completing an extra driving course)
- Good driver discount (for a clean driving record)
- Multiple vehicle discount
- Low-mileage discount (for pay-per-mile and telematics programs)
2. Raise Your Deductible
A quick way to lower your insurance premium is to raise your deductible. But keep in mind that the higher your deductible is, the more you (or your teen) will have to pay out of pocket if you file a claim.
3. Buy Minimum Coverage
If your teen has an older, lower-value vehicle, consider dropping comprehensive or collision coverage and sticking with liability only. Liability will cover any damage or harm your teen causes to another vehicle or driver–up to the limits of their policy.
4. Drive Safely
Drive safely to lower your risk of getting into an accident, and teach your teen to do the same. Over time, your premiums will gradually decrease, resulting in more money back in your pocket.
If you’re about to add your teen to your insurance policy, make sure to shop around first to find the best coverage options and pricing.
Contact us for an auto insurance quote for you or your teen. We’ll help you find a great company to work with and ensure you’re taking advantage of all available discounts.