Teenage drivers are the two words that can give parents the greatest, unutterable dread. If your children are getting close to being old enough to drive, you might be considering ways to cut insurance rates or even if you should add your adolescent to your insurance coverage at all. It’s difficult to decide: After all, young driver insurance coverage can increase your premiums by more than $1,000 annually.
Why is teen driver insurance so expensive? Insurance companies base their premium calculations on the likelihood of an accident. Since risk increases with level, so does the likelihood that they will be required to pay for a driver’s claim. Who are the world’s most dangerous drivers, then? Teens. Drivers between the ages of 16 and 19 are four times more likely to crash than drivers of other ages, according to the Centers for Disease Control (CDC). Teenagers account for over 30% of auto-related injuries, when cost-based statistics are taken into consideration, despite representing just roughly 14% of all drivers on American highways.
This increases the stakes for insurance providers and makes it a life-or-death situation for parents and teenagers. In 2009, there were 3,000 teen fatalities in the United States, making car accidents the number one killer of teenagers. [CDC source] Boys in adolescence are at considerably greater danger. It is feasible to lower your insurance costs and improve teen driver safety, but doing so requires looking at some of the factors that contribute to their high risk of driving. They mainly consist of inexperience, a failure to detect potentially dangerous situations, aggressive or irresponsible behavior, distractions from passengers, and, of course, drunk driving.
The five suggestions in this article will not only enable you to reduce the cost of your auto insurance, but they will also improve your young driver’s safety.
5: Perform well in class
There are many benefits to doing well in school, but you probably weren’t aware that students can save money on their auto insurance by maintaining good grades and attendance. You might be entitled to (or be able to negotiate) a five to ten percent reduction for teenagers who maintain a B average, or a 3.0 grade point average on a 4.0 scale [source: Kroll], though this varies from insurance provider to insurance provider.
There are more educational approaches to lower the cost of insurance. Taking a safe driving course or a drivers’ ed course can reduce your insurance costs by as much as 15%.
Most insurance providers will allow you to remove a teen driver from the insurance plan until the end of the semester if they will be attending college away from home and won’t be using the family vehicle. There may be a distance restriction, usually 100 miles (161 kilometers). If the college is closer, the insurance company might not approve it, which sounds strange because a teen who commutes 80 miles (128.75 kilometers) to school each day is unlikely to be using the family minivan.
4. Drive Sensibly
There is one surefire technique to increase the cost of your insurance: A mishap occurs. The best approach for a juvenile driver to keep those rates low is to drive well, pay attention, and be cautious. Any event that leads to an insurance claim will increase your premiums, void any “good customer” discounts, and end up costing you a lot of money in the long run. Moreover, we’re not only referring to catastrophic mishaps (which, obviously, are to be avoided). Any parking lot collision or fender-bender will raise insurance costs.
Do not assume that you are exempt from liability simply because you were not the cause of the incident. Your driving record will be impacted and you will receive points for moving offenses such reckless driving, rolling stop signs, and speeding, which will result in an increase in your insurance premiums. If you are discovered driving while intoxicated, the penalties are significantly higher, and you could face fines and license suspension.
Get a Secure Used Car.
The type of vehicle the youngster will be operating greatly affects the cost of insurance. Contrary to popular belief, your car’s color has no bearing on the cost of your insurance. The car’s make, model, and year are what matter most. New automobiles cost far more to insure, and insurance costs rise with the value of the vehicle. Insurance for powerful high-performance vehicles is also very expensive.
This does not imply that you should give your teenager a cheap, old car. Modern safety equipment like anti-lock brakes, airbags, and stability control qualify for discounts on insurance costs. A three to four year old, in good condition vehicle with the most safety features is the optimum. To determine which vehicles in the United States have the highest safety ratings, you can look at national crash test data.
But it’s not only a problem of security. Insurance will be more expensive for a vehicle that attracts thieves. Visit the National Insurance Crime Bureau to find out which vehicles are most likely to be stolen.
This also brings up a rare instance in which a youngster might find it more affordable to obtain their own insurance independent of their parents’ insurance. A separate policy might be less expensive if the teen will be driving a different automobile than both parents’ flashy, high-performance vehicles.
Raise Your Deductible (option 2)
The amount you’ll be required to pay out of pocket in the case of a claim is the deductible. After you’ve paid your deductible, the insurance provider handles the remaining costs. How could you possibly desire a high deductible? Your premium will be lower the bigger your deductible is.
Increasing your deductible to $1,000 is essentially taking a calculated risk. You’re making a bet that your adolescent won’t be involved in an accident. If so, a minor accident will be covered by your deductible, so you won’t need to file a claim. If there is a serious accident, the damages could be so great that the $1,000 will look like pennies compared to what the insurance company will pay. So increase your deductible, have some very serious conversations about driving safety with your kid, and cross your fingers.
Comparing pricing is one of the simplest methods to reduce the cost of your auto insurance. Don’t accept the first insurance quotation you receive from the family’s regular agent. The premiums charged by different firms can vary by hundreds of dollars.
1: Think about not getting any insurance.
Is it even necessary to insure my teen? is a frequent concern parents have regarding teen insurance. We’re not really sure how to respond to that because this essay isn’t meant to be particular legal counsel. Before you make any judgments in this regard, make sure you are aware of the regulations set forth by your state as well as the insurance provider.
However, because you requested a straightforward response, here it is:
The age of your children is known to your insurance company. When they become 16, they are aware. Some businesses even automatically include them in the policy. Be careful to inform your insurance provider if your kid will not be driving.
You probably won’t need to get the teen insured if they won’t be using the family car at all or very little. The incident should be covered by the parents’ insurance in the event that your adolescent is involved in an accident while driving without insurance, just like if a friend had borrowed the vehicle. It’s doubtful that the insurance provider will outright reject the claim. They might, however, require you to pay retroactive premiums going back to when the adolescent originally obtained their license.
There is a significant caveat to this rule: If you don’t let the insurance company know that your adolescent has a license and has been driving when your policy is up for renewal, they may be able to dismiss future claims if they cause an accident. I didn’t lie about any of the information that determines how much of a premium you’re going to charge me when we bought this policy, according to a condition in the contract. It can be deemed a breach of that condition and justification for the insurance provider to reject the claim if a teen driver isn’t mentioned. You are far better off insuring your teen because that might end up costing you a lot of money.
Here is an example, just in case the previous emphasis wasn’t clear: Your teen hits a Lexus from behind. one having a tag price of $50,000. Let’s assume that the Lexus sustains damage from the collision that costs $8,000 to repair. Because your child was not covered by your insurance, the insurance company rejected the claim. No matter what your deductible is, enjoy spending that $8,000 on your own. Even more, we haven’t even touched on fixing your own car. Be honest with your insurance provider as a result.