Subscribing your teen driver to an existing car insurance policy may be less expensive. To reduce costs further, The Zebra suggests parents encourage good grades among their teen, make sure that he or she stays in an affordable vehicle, and look into discounts available that could reduce rates.
Cost of the Car
Addition of teenage drivers can be expensive. According to research conducted by The Zebra, an average annual premium for 16-year-old drivers stands at over $3,960 annually; this can quickly add up and strain family budgets. But there are ways you can reduce these costs; such as shopping around and gathering quotes from multiple insurance providers as different carriers may provide different rates; additionally choosing an economical vehicle such as one with less power can typically bring savings over more powerful or luxury options.
Reduce coverage amounts and deductibles can save money, too. For example, dropping physical damage coverage down to state minimum requirements while selecting a higher deductible will significantly cut premium costs. You could also lower car insurance premiums by encouraging good grades or enrolling in a driver education or telematics course that rewards safe driving habits with discounted policies.
Keep in mind that even if your teenager is listed on your policy, once they turn 18 it’s essential for them to obtain their own separate policy in order to build credit. Furthermore, increasing coverage amounts with time could prove worthwhile depending on the value of assets such as property damage – this may mean increasing bodily injury coverage up to at least $100,000 and property damage liability coverage to $250,000 or even $100,000 depending on circumstances.
At this stage, it would also be wise to meet with an independent agent regarding your teen’s car insurance needs and options available to them. Since many variables affect cost of car insurance for teenagers, having access to such an agent would provide invaluable guidance.
Cost of the Insurance Policy
Teen insurance rates depend on more than just gender, age and driving history – they also depend on the type of car and coverage levels being carried by your teen. Higher-end vehicles with costly safety features tend to cost more to insure than cheaper, smaller vehicles; sports cars or convertibles in particular will generally carry higher premiums than four-door sedans; so before handing your teen the keys for any new vehicle it is wise to consult an agent first.
With several discounts available to teens drivers, auto insurance coverage can become more cost-effective for them and their parents. These discounts typically apply when their grade point average is 3.0 or better; driver training/defensive driving course discounts; devices or apps that track how they drive; bundling your teen policy with other policies such as renters/homeowners policies or umbrella policies which provide extra liability protection are all ways you can save.
As a parent, it is also wise to increase your coverage limits as an extra safeguard in case one of your teenage drivers gets involved in an accident that results in significant bodily injury or property damage claims. While increasing these limits is not essential, increasing them could save you from paying out-of-pocket if something major does happen to them.
Keep in mind that many states require minors to sign insurance contracts jointly with an adult, which means they won’t be eligible to purchase their own policy until reaching legal age, usually 18 or 19. As such, teens are usually better served staying on their parents’ policies until they’re old enough to purchase their own policies.
Your teenager can save money on car insurance by selecting an older and safer vehicle that’s less valuable, which will lead to lower premiums. Also consider opting for smaller fuel-efficient models; cutting physical damage coverage to the state minimum could save money as well. However, you should never compromise on having enough liability coverage; accident forgiveness policies allow your policy to remain unchanged after their first at-fault accident on record.
Deductibles
Make and model of a car have an immense effect on insurance premiums, so if you are shopping for your teen, aim for one with the lowest insurance premiums possible. A sporty coupe may tempt, but they tend to cost more to insure than sedans or SUVs. Also important when purchasing a new vehicle for them is having sufficient coverage – full coverage usually provides liability protection as well as personal injury protection (PIP), which covers medical expenses incurred after an accident regardless of who was at fault.
Teenagers should be encouraged to complete a driver’s education course. Not only will it enhance driving skills and reduce insurance premiums, but most insurance providers also offer this class online; to find out more details it would be wise to contact them. Furthermore, maintaining a B average or better in school could qualify them for a good student discount of 16% or even greater which could reduce premium costs significantly.
Other discounts for teens include an away-at-school discount and premium reduction by taking an approved defensive driving course. Some insurers also provide accident forgiveness, meaning their premium won’t increase after an at-fault accident for an allotted time period.
Payment of annual premiums upfront rather than making monthly payments can save 4.9% on average; teens driving older vehicles that cost less can increase savings further by decreasing collision and comprehensive coverage limits.
Once a teen driver has established a good driving history, their rates should decline significantly – providing an ideal opportunity to switch insurance providers and find the most competitive deal. Review quotes frequently as premiums can change due to changing market factors affecting premium rates; don’t forget to investigate each company carefully – read customer reviews as well as AM Best financial ratings before selecting one! Being covered when needed is just as essential.
Discounts
insurance companies provide several discounts that can lower the cost of car insurance for teens, such as good student and safe driver discounts based on the driver’s grades and driving history, taking an approved driver education course (though qualifications for such discounts vary per company), selecting a more economically priced vehicle with safety features like antilock brakes (newer sports cars can often cost more to insure than older, moderately priced ones with safety features) as well as increasing liability coverage limits while decreasing collision and comprehensive deductibles – these savings add up quickly over time!
One effective strategy to save on car insurance costs is by enrolling in a multi-car or family plan with your insurer, typically at lower premium rates than having separate policies for every teenage driver. When shopping around for coverage quotes, be sure to inquire about these discounts when asking about them.
If your teen drives your current vehicle, adding them to your policy can also save money. Typically this option will be cheaper than purchasing them their own new or used car and insuring it themselves, though you may need to co-sign.
Before investing in additional expenses for peace of mind, consider whether they’re worth the cost. A car accident can be devastatingly expensive and having adequate coverage is vital in protecting their future financial security.
Parents can help their teen become safer drivers by setting an example and being patient as they learn. Encourage them to abide by road rules. You should also consider whether it would be best for your teen to purchase their own car or remain on a family policy; owning their own means having individual insurance rates that could be higher; however if financed vehicles are involved you may require full coverage policies as well.