Learning to drive is an exciting rite of passage for teenagers. But with the privilege of driving comes the responsibility of getting insurance. And auto insurance for teenagers is notoriously high.
Insurance companies consider teen drivers a high-risk group, so adding them to your policy will no doubt cause your premium to increase. We’ll break down how to get insurance for your teenager and tips for saving the most money.
If you have a teenager armed with a brand new driver’s license, making sure you have the right auto insurance is a priority. Whether you are adding them to your current policy or getting them established with their own, here’s how to do it.
Contact your agent. If your agent isn’t already aware you have a new driver in the household, you’ll need to notify them. Have your teenager’s driver’s license information handy.
Discuss coverage options. Is your teenager getting their own car? Will they just be driving your car sometimes? Are there specific discounts you are now eligible for?
On average, adding a teen driver can raise your rates between 50% and 130%. Be sure to discuss with your agent all possible coverage options and discounts that could help lower your bill. For example, you might be able to shave off some of the costs by designating the teen as the primary driver on the least expensive car you own.
To purchase your own auto insurance policy, you must be a legal adult. In most states, that means you must be at least 18 years of age. If you want to purchase an individual policy and you’re not of age, you need someone co-sign.So should your teen have a separate policy or should you add them to an existing one? While a more expensive option for insurance, getting an individual policy can be an excellent choice in the long run.
You’ve worked hard for the top safety rating that you enjoy right now. This rating comes with many savings opportunities such as accident forgiveness, vanishing deductibles, and lower rates. If your teen gets into an accident while on your policy, it may lead to higher rates for you.
Once a teen moves out, they need to get their own policy. If they move away for school, that will involve a different ZIP code, which comes with variations in costs. If they own a policy now, they may get savings when they move because they have an established relationship with an insurer.
Because you buy a teen’s policy when they have a clean driving record, they can begin working on an excellent rating right away.
According to the latest data from Insurance.com, it costs an average of $3,442 to add a teenager to an existing auto insurance policy. Insurance costs vary significantly by provider, so it’s critical to shop around and compare quotes. Many insurers offer a few specific discounts specifically to teens and students. The actual amount of the discount depends on the carrier.
Car insurance for teens can be expensive because, statistically, they are the demographic at the highest risk for getting into a car accident. Insurers protect their investments by charging them the highest rates.
The younger your teen driver is, the more expensive the policy will be. In addition, male teens typically pay higher premiums than females. Once again, it’s because statistics suggest that young male drivers get into more accidents than young females.
It’s tempting to just choose the cheapest policy when insuring your teen given the high cost. Many parents may wonder if it’s necessary to get full coverage, or if it’s okay to just get the minimum state-required coverage?
Full coverage means having more than just the minimum insurance that is required by your state. Typically it’s a combination of different options based on your needs. Some coverage options that go beyond the minimum might include:
Boosted liability insurance. You elect to buy more than the state-mandated minimums. You might double or triple the protection you buy.
Comprehensive and collision. These coverages provide protection from damage that at-fault accidents and weather-related incidents can cause.
Increased medical coverage. If you’re in an accident that results in any bodily injury, this coverage steps in to cover expenses.
No matter how good a driver your teen is, remember that they are at the highest risk of causing or being involved in accidents. We recommend having more than just the state-mandated coverages.
It’s a common misconception that your teen doesn’t need car insurance until they actually own a car. That’s not true. In fact, most states now require all licensed drivers in a household to carry car insurance.
Even without a car of their own, the teen could still be considered a licensed vehicle operator. If you own one or more cars, there’s a presumption that the teen has access to the vehicles and may drive one.
Insurers typically allow you to buy a policy that doesn’t have a specific vehicle tied to it. They call it non-owner coverage. These types of coverages can be significantly more expensive than adding the teen to your policy at this point.
Insurers figure that a teen might drive your sports car or expensive new-off-the-lot truck. You might intend for the teen to drive the oldest car you own. In this situation, we recommend adding the teen to your existing policy – or assigning a vehicle to the new driver as their own and buying a policy for it.
You can save when buying auto insurance for teens. There are discounts that even freshly-minted drivers can qualify for.
High school and college students with at least a B grade average can save as much as 7% on car insurance. Typically, you don’t have to prove academic standing after buying the policy.
If you are insured with GEICO, the discount continues until the driver turns 25 – even if they’ve graduated from college well before then.
Reduce the teen’s auto insurance costs when they go away to college and leave the car at home. If they move at least 100 miles away and the car’s in your garage, they can save as much as 30% off their policies.
However, State Farm stipulates that the teen may only drive the car when at home on holiday.
Your insurer may have a list of companies they work with. These are formal driving schools with licensed instructors that teach the teen to drive defensively. When the student passes one of these approved programs, forward the information to the agent for a discount.
Each company has a different set
How do you keep a teen safe when they’re on the road? For starters, insist that they enroll in a formal safe driving course. When they hear about the rules of the road from someone other than mom or dad, it makes a significant impact. Most importantly, doing so sets them up for lower insurance rates later on. However, there are other ways for teens to stay safe while on the road as well.
Obeying the basic rules of the road, which includes the speed limit, is essential. By going the right speed for the section of road, teens are less likely to make risky maneuvers such as running almost-red lights or taking turns too fast.
It’s tempting to forgo the seatbelt when they’re just driving down the road to the gas station. However, statistics suggest that many accidents occur close to home. Make it a rule that the seat belt goes on every time your teen backs out of the driveway.
If multiple drivers share a vehicle, each one should adjust the seat to meet their needs. This might mean moving it closer or farther away from the steering wheel. Your teen might have to adjust it up or down. Similarly, they need to adjust the headrest, rearview mirror, and side mirrors. Doing so is crucial for comfort as well as ease of visibility. Yes, it takes a little time. But it’s well worth it.
Listening to loud music is fun. However, in a car it’s dangerous. It keeps teens from hearing the emergency vehicles that need to go through a red light. Only use the radio or stereo for background sound while driving.
It’s easy to get distracted when having a lively conversation with a passenger. Avoid heavy conversations until arriving at the target destination.
By giving themselves extra time to get to their destinations, teens won’t be tempted to rush, drive fast, or cut corners. It makes defensive driving an achievable goal. Besides that, it cuts down on stress. If they get stuck at the light, it’s no big deal.
Start by selecting the right car. Common sense might tell you to buy an old beater. From a comprehensive and collision coverage point of view, this might make sense. However, having modern safety technology such as anti-theft devices, multiple airbags, and anti-lock brakes can reduce the cost of insurance significantly.
You might have to forgo the coolness factor. Although your teen isn’t envisioning themselves behind the wheel of a minivan, these cars are typically cheaper to insure. A good example is the Honda Odyssey LX. It doesn’t have a lot of power to get a young teen in trouble. Besides that, it has all the safety features insurers like.
If your state allows the insurer to factor in credit score when determining an auto insurance quote, work with your teen on getting a good rating early. Get them a low-limit credit card that they pay off regularly. It helps build credit, which can help lower auto insurance.
Insuring a teenage driver isn’t cheap; however, there are plenty of ways to reduce the premium costs. Squeeze makes comparison shopping for auto insurance quick and painless.
When your teenager reaches the driving age, a lot changes for them. Their independence is growing, as is their confidence in their abilities and skills in life. When they begin driving with their learner’s permit and eventually with their license, driving becomes one of these skills.
While preparing your teen for these milestones, you’ve likely talked to them about the dangers of texting and driving, driving irresponsibly, and how accidents can cause serious injuries and even be fatal. While these are essential lessons to discuss with your teen, many parents overlook the insurance discussion.
Consider cultivating your teen’s sense of responsibility and independence and teach them important skills they’ll need for the future by letting your teen be actively involved in the car insurance decision. The III explains how this helps cultivate your new driver’s perspective on the relationship between cost and safety and how being a responsible driver is essential!
If you already have a full coverage auto insurance policy, you may want to consider adding a little extra to your liability plan.
While your insurance will undoubtedly increase when adding a teenager to your policy, your level of worry doesn’t have to increase with it. In fact, increasing your liability insurance is a great way to help you sleep soundly at night and confidently let your teen drive.
Liability insurance is a form of auto insurance coverage that pays for damages to another vehicle in the event that you cause an accident. Comprehensive and collision are what pay for your vehicle, but liability pays for the other vehicle.
If your teen does get in an auto accident, making sure you have enough liability coverage to pay for damages can be the difference between thousands of out-of-pocket expenses.
The best way to save on auto insurance is to shop, shop, shop. Whether your teen likes shopping or not, it can end up saving you hundreds of dollars and even help you dig up some of the best discounts!
In addition to using comparison tools to shop for auto insurance, here is a list of the best car insurance companies for teens.
Erie Insurance is known as the best car insurance provider for new drivers. It’s reliable, stable, and has great rates for the newest drivers in your family, especially if they’re under 21 years old. In fact, unmarried drivers younger than 21 can get up to 20% off their policy! This car insurance company is only available in some locations and is in the Northeast and Midwest regions.
Allstate is known for its great savings, especially for college students. This coverage is available in all 50 states, and while they still offer discounts, they have slightly higher rates for teens than other companies.
State Farm has an abundance of discounts for teen drivers and students, competitively low rates for students, and large accessibility no matter where you live.
Progressive offers low rates for good driving records, even if it’s for a new driver. This company offers generous rewards and discounts for safe drivers and young drivers.
Nationwide is known for its accident forgiveness plan. Mistakes happen, which is what makes Nationwide’s accident forgiveness plan so desirable. They also offer sizable discounts, but they are not available everywhere.
If you’re a military family, this company offers great rates for teens. If you are in the military or have served in the military, you may qualify for a USAA insurance policy!
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