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Insuring Teen Drivers Affordably

For teenagers, getting a driver’s license is an exciting rite of passage that means more freedom and fun. For parents, the prospect of a teenage driver is not nearly as thrilling. Having a teen driver means more worry and more expenses for parents, particularly with regard to car insurance. Teenagers have the highest auto insurance rates of any demographic group, which is why coverage for young drivers is so pricey.

If you’re a parent of a current or soon-to-be teen driver, you’re probably dreading the day you have to add your teen to your policy and wondering how you’re going to afford to do so. Your fears are not entirely unfounded—car insurance premiums can rise by up to 50%-100% upon the addition of a teen driver. The good news is that insuring teen drivers cheaply is not impossible; it just takes a little know-how on your part. Read on to learn the secrets of insuring a young driver affordably.

  1. Get offers from at least three insurers. Car insurance rates tend to be fairly similar among insurers for older drivers, but premiums for teenaged drivers can vary drastically. Your current insurer may not offer the best rates once you add your teenager to your policy, so make sure you at least look into a few other carriers.
  2. Make sure your teen is assigned to the cheapest car. How your insurer assigns drivers to vehicles will have a massive impact on your rates. For example, some insurers assign the most expensive driver to insure (your teen) to the most expensive vehicle by default. If you have expensive cars, your premiums will go through the roof once you add your teenager to the policy. To avoid this, think about getting your teenager his/her own car that won’t cost as much to insure.
  3. Raise your policy deductibles. Maintaining a $250 or $500 deductible with a teen driver on your policy is probably not financially plausible. To cut your rates, raise your deductible to at least $1,000. Raising a $250 or $500 deductible to $1,000 can save you as much as 10%-20% on your car insurance premiums.
  4. Choose your teen’s car carefully. If you intend to get your teenager his or her own car, make sure you choose wisely. A teenager driving a new or sporty vehicle will be almost uninsurable. For the cheapest car insurance rates, select a safe, older sedan that won’t cost much to repair.
  5. Encourage your teen to keep his/her grades up. Most insurers offer a good-student car insurance discount that can save you up to 10% on your premiums. Usually, teenagers must have at least a B average in order to qualify. If your teen already gets good grades, make sure you let your car insurer know. If not, consider paying your teen to bring his/her grades up to keep your premiums low.
  6. Ask your insurer about driver’s ed discounts. Having your teen complete a driver’s education course may qualify you for discounts of up to 15% on your car insurance policy. Before you enroll your teen in the course, call your insurer to find out if they offer the discount and, if so, how much it would save you. Also make sure the course your teen completes is approved by the insurer.
  7. Have your teen complete traffic school for ticket forgiveness. If your teen driver gets a ticket, your premiums will skyrocket. However, in most states, drivers can complete traffic school and have the ticket removed from their records. If your teen has this option, make sure he/she takes it.