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Finding the best car insurance for teens

Find the best car insurance for teens

Money-saving tips for adding a
teenage driver to insurance

save money on teenage drivers

Mitigate your own risk by limiting the time the teen is behind the wheel and the number of passengers. Ban cellphone use while driving. Preventing a crash protects your insurance rates.

save money on teenage drivers

Call your agent to find out when your teen driver must be added to your policy - when he has a permit or when he has a license.

save money on teenage drivers

Raise your liability limits, but also raise your deductible to offset the premium increase.

save money on teenage drivers

Find out whether it's cheaper to put your teen on his own policy or add him to the family policy. Your agent can run the rates for each scenario.

save money on teenage drivers

Be proactive in asking your agent to look for car insurance discounts for you.

save money on teenage drivers

Have your teen rated on the oldest car in your household.

save money on teenage drivers

If you're buying a vehicle for your teen, pick something big and slow, with the latest safety features.

Having a teen with a driver’s license can be downright nerve-wracking. It can also put a dent in your wallet. Adding a teen to your car insurance policy can double or even triple your rates.

So, what are the best ways to minimize the pain?

Loretta Worters, vice president of media relations, Insurance Information Institute (III), suggested discussing with the teen driver about the responsibilities of driving a car. You can also go over how being a safe driver means lower insurance costs. Don’t forget to discuss driver safety, too.

"Have the discussion about driving under the influence as well as the importance of not driving while distracted,” Worters said.

The risks and expenses are not shifting, but here are tips on how to land the best coverage as well as cut some costs on car insurance for your teen driver.

 

Adding a teen driver to an auto insurance policy

The sobering reality is that a parent can expect car insurance rate increases of about $3,000, on average, when adding a teenager to the policy. Boys cost more. Insurers view them as a bigger risk.

The costs are even worse for teens who get their own policy. Those teens can expect to pay more than $6,000.

AAA says there are three essential things to consider before adding your teen to your insurance policy:

  • Finances: Can you and your teen afford the cost of auto insurance, gas, and maintenance? Who will pay for the car? Have you found a safe car that fits your family budget?
  • Readiness: Has your teen demonstrated safe, responsible driving behavior, and driven alone for at least six months without a crash or ticket? One idea before handing over the keys is to use a parent-teen driving agreement to prove the teen is ready to take responsibility.
  • Involvement: Is your teen ready to own, operate, and maintain a car? Involving your teen in the purchase process can be a great learning experience about the costs and responsibilities of car ownership.

    After you've addressed those issues, you're off to the races. Well, no, not the races; slow down.

     

    When should you add a teen driver?

    Auto insurance companies vary in terms of when they want you to add your teen to a policy. Some prefer that you put your teen on when he or she gets a learner's permit; others say to wait until the driver's license is in hand. Be sure to check with your agent or insurer to find out when to add to the insurance.

    You don't want your teen involved in a fender-bender and then find out too late that the parents' vehicle wasn't covered because the teen wasn't added at the right time.

    The III recommends contacting your car insurance agent or representative before your teenager gets his or her learner's permit. That way, you'll have a clear understanding of the costs, when and how to add your child's name onto the policy, and other ways to navigate the process.

    Mike Jelinek, head of content at ConsumersAdvocate.org, suggested looking at car insurance companies that specialize in teen drivers. These insurers have good student discounts. They also provide lower rates when children attend college away from home. Some insurers even offer discounts after the teen completes a defensive driver course geared to young drivers.

    Coverage for the teen driver is generally designed with the parents in mind. So, experts said it often makes more sense to add teen drivers to the parents' policy than get separate coverage.

    Instead, a parent could also benefit from a multi-vehicle discount if the teen owns a car. However, insurance companies differ significantly on their pricing, so do your research.

    "Parents should also look at bundles offered by specific companies," added Jelinek. "GEICO offers a Family Pricing Program that allows teen drivers previously on their parent's policy to get their own at a lower rate."

    Even if the teen were to opt for his or her own policy, a parent would have to co-sign. Nevertheless, you may find it makes more sense for the teen to get a separate policy.

    “It might make sense in some cases due to the influence on the parents' premium price," said Jelinek. "If the teen has been accumulating infractions that increase the insurance cost, it would make sense for a parent to get them on their own policy."

    Jelinek recommended narrowing the list of high-quality companies to a select few, and from there, checking availability in your area. One place to start is Insure.com’s Best Auto Insurance Companies.

     

    Car insurance costs for a teenage driver

    Your car insurance cost will likely skyrocket when you add your children to your policy.

    Tamra Johnson, AAA spokesperson, said the risk of a teen getting into an accident is significantly higher than other age groups. That’s especially true in the first year of driving.

    Motor vehicle crashes are the leading cause of death among teens, according to the Center for Disease Control.

    The CDC's data show that in 2016:

    • 2,433 teens in the United States between the ages of 16 and 19 were killed in car accidents.

    • 292,742 were treated in emergency rooms for injuries suffered in motor vehicle crashes.

    That means that six teens ages 16-19 died every day due to motor vehicle crashes and hundreds more were injured.

    AAA Foundation for Traffic Safety recently examined teen driving behaviors between 2007 and 2015. The group found that 59 percent of crashes contained some type of potentially distracting behavior during the six seconds leading up to a crash.

    "There are so many distractions today, such as phoning and texting," said Worters, "but there are other distractions that can be just as deadly such as chatting with friends who are in the car or blasting the radio. And teens should be responsible passengers when in their friends' cars."

     

    Squeezing out auto insurance savings

    There are several ways to eke out discounts on your auto policy, even with that money-sucking teen of yours weighing it down.

    A majority of auto insurance companies offer a good student discount for both high school and college students. Usually, this means that the student must maintain a "B" (3.0) or better average to qualify. You must also provide proper documentation. A "my child is student of the month!" bumper sticker won't cut it for documentation.

    Homeschooled teen drivers may also be eligible, and must achieve a certain score on standardized tests. The discount normally applies to bodily injury liability, property damage liability, PIP, medical payments, collision, and comprehensive coverages.

    The average base for annual car coverage is $6,110 for student drivers, and with a good student discount, the annual policy drops an average of $361, bringing the policy average to $5,750. This particular discount is larger than most others you can find for teen drivers.

    If your good student heads for college right out of high school, you've got a couple of years that he or she is technically still a teenager. These away-at-college teens with good grades can get a discount. The discounts vary by how much your teen drives the car, whether the car is away at school with him or her, and whether or not the permanent address is still that of the parent(s).

    Another way to limit the financial damage is to make sure your teen is assigned to your household’s least valuable car.

    "The kind of car your teen drives can impact safety, as well as insurance costs," says Johnson. "Many experts agree that mid-sized sedans are the best choice for teens. Small cars don't offer as much protection in crashes, sporty cars may encourage speeding or recklessness, and SUVs and pickup trucks are more difficult to maneuver and more likely to roll over. Check with your insurance agent rates before you buy a car."

    You can also save a chunk by increasing your deductible on one or all of your vehicles. If you file a claim after raising your deductible, you'll pay a larger share of the costs, but the savings might be worth it, overall.

    Check whether your insurance company offers a "safe driver" program. Teen participants in these programs sign parent-teen driving contracts that outline the young driver's responsibilities, which could include not having teen passengers in the car, being home at a certain hour, and the consequences of failing to meet these expectations.

    "Continue to drive with your teen under new and challenging conditions so there won't be surprises (and potential crashes) when you're not in the passenger seat to help out," says Johnson. "Research shows that teens with more involved parents get fewer tickets and engage in less risky driving. Avoiding tickets and crashes will help keep your insurance rates down. A parent-teen driving agreement can help you set rules."

    Janet Ruiz, director of strategic communications, III, said that driver training courses and telematics devices are offered by many insurance companies, as well.

    Allstate, for instance, provides a telematics feature called the Drivewise app. That app gives policyholders up to 10 percent cash back for signing up and 25 percent cash back every six months for safe driving. This app gives the driver feedback on driving behaviors, such as hard stops or speeding. This is a particularly helpful way to chip down your premium cost with a teen driver, provided he or she rises to the challenge.

    Experts can’t stress this enough, and we are reminding you: most insurance companies aren't going to be ringing you up to tell you about all the discounts you can get. Ask as many questions as you can and peel away at the auto insurance onion, even if it makes you cry.

    Life brings changes, and policies also update. It's important that you review the available auto insurance discounts annually.

    While you look to reduce your costs, make sure you don’t sacrifice liability insurance coverage. State minimums for liability insurance aren’t enough to fully protect your teen. Instead, consider purchasing higher amounts of liability coverage to protect your young driver in case of a crash.

    "If your teenager is found negligent in an accident and the damages exceed your insurance limits, you will be held financially responsible and could be sued in court for the amounts not covered by insurance," warns III

    While paying more for liability insurance doesn't feel like you're "squeezing out savings," ultimately it may save you a whole lot.

    Adding a teenager to your auto insurance will increase your rates. There’s no way around it. However, by following the tips on this page, you can minimize your financial impact and protect your teen, vehicle, and finances, and find the best car insurance for your teen.

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