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UPDATED: Mar 13, 2020
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Providing auto insurance coverage for a teenage driver is rarely cheap, because insurance companies charge more for these drivers than for older, more experienced driver. This is because teenagers are statistically more likely to become involved in traffic accidents than experienced drivers. Compare car insurance quotes for your teen today for FREE!
Although you can expect to pay higher premiums for your teen, it is possible to keep your car insurance quotes cheap. Several strategies can lower your premiums, particularly when you use these strategies together. Try our FREE ZIP code search now!
Not All Insurance Premiums are Equal
One of the most effective ways to lower auto insurance premium costs for your teen is to obtain quotes online. Most states allow insurance companies to develop their own rating structures, which means that they each charge different prices for similar coverage.
Shopping online gives you the opportunity to compare quotes from several different insurance companies in the privacy of your own home or office. This strategy can help you find the best coverage for your teen at the lowest price.
Whether you choose to visit insurance company websites individually or use a comparison website to obtain multiple car insurance quotes at once, you will need to have several pieces of information ready. Having the required information on hand will ensure that you obtain accurate quotes, and won’t be surprised by a premium uprate after you purchase a new car insurance policy.
Make sure you have your teen’s:
- Driver’s license number
- Social Security Number
- Date of birth
- Three-year driving history
If you obtain quotes directly from insurance company websites, make sure that each quote reflects the same limits and coverages. Selecting different coverages and limits will result in an inaccurate comparison.
Choose Your Teen’s Coverages Wisely
Your teen will have to carry liability coverage, which takes care of property damage and injuries sustained by other passengers, drivers, and pedestrians if your teenager causes a motor vehicle accident.
Most states also require insurance companies to offer uninsured motorist coverage to protect your teen if an uninsured driver causes an accident.
Other coverages are optional, and may not be necessary depending on your teen’s needs. For example, if your teenager drives a car with a resale value of less than $3,000, you might decline to purchase comprehensive and collision coverages.
These coverages pay to replace or fix your teen’s car after an accident, but only up to the market value of the vehicle. These coverages also commonly feature a deductible, which is the amount you will have to pay toward replacing or repairing the car.
If your teenager drives an older car that is worth $2,000, and you carry comprehensive and collision coverages with a $500 deductible, these coverages will only pay up to $1,500 for repairs or replacement.
This maximum payout may not be worth the premiums you pay for these coverages. Declining comprehensive and collision coverage can reduce the costs of insuring your teen driver by 30 percent or more.
Likewise, you may also decline other optional coverages offered by your insurance company. If you have a low-deductible health insurance policy, for example, you might not need medical payments coverage to pay for your teen’s injuries sustained in an accident.
Towing, rental, and accidental death and dismemberment coverages may also not be necessary for your situation.
Use Policy Discounts to Lower Your Costs
Car insurance companies use discounts as tools to attract and keep policyholders. You can take advantage of policy discounts to help control your teen’s insurance premium costs, while providing your teenager with the appropriate coverages and limits.
Before you buy a car insurance policy, check with the company to find out if a “good student” discount is available. If your teen maintains a good grade point average, usually 3.0 or higher, the company might discount your premiums by 10 percent or more.
You will need to provide the company with a copy of your teen’s grade report after each school term to maintain a good driver discount.
Adding your teen’s car to your own auto insurance policy is more cost effective than having your teen purchase a separate policy. If you insure more than one car on a policy, most auto insurance companies will provide a discount that will reduce your rates by 5 to 10 percent.
Your insurance company may provide a variety of other discounts to help you lower your car insurance costs. If your teen drives a newer car and requires comprehensive and collision coverages, consider installing an anti-theft device in the vehicle.
Because an anti-theft device reduces the company’s risk of having to pay to replace a stolen car, you might earn a discount of 5 percent or more off your teen’s comprehensive and collision coverage.
Because discounts are cumulative, you should take advantage of as many discounts as possible to keep your car insurance costs low.
Teach Your Teen to Drive Defensively
You might assume that the training your teenager receives in an driver’s education course will be enough to make your teen a good driver. Providing additional support and instruction, though, can help ensure that your teen knows how to avoid accidents and traffic citations.
The time you spend educating your teenager about safe driving practices can pay off in the form of lower car insurance premiums. Insurance companies use information from your teen’s driving history to determine rates, and even a single accident or moving violation will dramatically increase your insurance costs.
If your teen maintains a clean driving history, you can expect your car insurance premiums to gradually decrease. Some insurance companies will even offer a discount for each policy term during which your teenager does not file a claim.
Don’t Skimp on the Essential Coverages
Although you can save money on your teen’s auto insurance premiums by declining unnecessary coverages, avoid skimping on the essentials just to save a few dollars.
Each state requires drivers to carry certain coverages and limits. Most commonly, states require low levels of liability coverage to protect other motorists.
Purchasing the minimum limits required by your state allows your teen to drive legally, but minimum limits are not enough to protect your family’s financial well being.
Opting for higher limits than required by your state gives you added protection if your teen is involved in a catastrophic accident.
Purchasing higher limits costs less than you might think. For example, depending on your insurance company’s rating algorithms, purchasing double the minimum liability limits might only increase your teen’s liability insurance costs by 10 to 15 percent.
With so many other options available for obtaining affordable auto insurance for your teen driver, there is little need to go without the coverage levels necessary to keep your family’s finances and assets safe.