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UPDATED: Mar 13, 2020
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If you’re the parent of a young driver you probably already know the cost of insuring him can be pretty high. Whether or not that is fair is neither here nor there; it’s more important to know how to find the best insurance for a reasonable price. We’re here to help with some tips to get you started.
You can begin searching for auto insurance policies for young drivers by entering your ZIP code into our FREE search tool!
If you’re a young driver no longer living with your parents, some of the tips we have to offer apply to you as well. You may have a harder time finding an affordable rate because you’re on your own, but good policies are out there if you are willing to look.
Tip 1 – Stay at Home As Long As Possible
Most states allow children to remain on their parent’s auto policies up through age 26 as long as they all reside in the same household. In some cases they can even remain on a policy after age 26 even though they will no longer receive the same discounts they may have gotten as students.
If your child can live in your home for a while, he will get a better deal on insurance.
The one thing to consider here is whether a young driver will purchase his own vehicle. Using the state of Maine as an example, car insurance companies are within their rights to charge you for any unlicensed driver living in your household. But if your young driver doesn’t own his own car, it’s assumed he’s using your vehicle. That will cost less than adding another car to your policy.
Tip 2 – Keep Young Drivers on Your Policy While Away at College
Even when young drivers do go away to college they can remain on their parent’s policies in most states. The state of Ohio does a good job explaining this in a PDF document you can download from their website. In this document, they make the case that it’s more affordable to keep your college student on your own policy rather than having him purchase his own.
Keep in mind that this may not be possible in all states or with all car insurance companies. You may find yourself in a situation where a young driver going to college in a different state will be required to register and insure his vehicle at his new destination. That might be something to check into before deciding on which college your student will attend.
Tip 3 – Insist on a Driver Education Course
According to the National Highway Transportation Safety Administration (NHTSA), some states require that at least some amount of driver education before young drivers can earn their licenses. Alabama, Florida, and Illinois are just three examples. Other states have no such requirements.
Furthermore, in states where driver education is a requirement the scope of that education plays a big role in insurance rates. In other words, a state where an education course includes only classroom time doesn’t see as much financial benefit as one where driver education also includes time behind the wheel.
If you live in a state that has no legal requirement for driver education, you should insist your young driver take such a course anyway. If your state requires a course that only has classroom time, insist your young driver sign up for an extended course with behind-the-wheel instruction.
The more driver education your child has under his belt the more affordable his car insurance will be.
Tip 4 – Be Wise about the Car He Drives
One of the most important things for parents of young drivers to remember is the fact that insuring their children costs as much as it does because teen drivers represent the greatest risk on the roads. Knowing that, it stands to reason that your car insurance company will charge you more if your teen drives an expensive vehicle.
While most of us would like to provide our kids with a new automobile on their 18th birthday that is rarely a wise decision on many levels. However, purely from the insurance standpoint, a brand-new car that is worth a lot of money is a guarantee you’ll pay through the nose for car insurance. Think twice before you do it.
If you really have your heart set on a new car, you might be better off buying it for yourself and giving your young driver your old car. You’ll pay less for insurance and you’ll get a shiny new ride to impress your friends, family members, and coworkers.
Tip 5 – Educate Your Kids about Safety
During the learner’s permit process, your car insurance company probably won’t be charging you to add your children to your policy. That is because the laws in most states ultimately make you responsible for any accidents rather than your young driver. Therefore, this is a perfect time to educate your children about driving safely and legally whenever they’re behind the wheel.
How will this help? If you can increase the likelihood of your child maintaining a clean record during the learner’s permit process he will probably have no strikes against him when he gets his license.
If your children can keep their records clean through age 25, they will get the best possible insurance rates.
On the other hand, a single accident or violations can send your young driver’s insurance rates through the roof. Remember it’s all about risk. Accidents and violations tell your insurance company they are more likely to lose money on your young driver. Thus, they charge more.
Tip 6 – Encourage Young Drivers to Get Good Grades
As a parent, how do you feel when your students get good grades? If you’re like most of us, you’re very proud of their accomplishments and less worried that they’re out getting themselves in trouble. Why? Because getting good grades requires kids to buckle down and work hard.
As it turns out, your car insurance company holds very similar opinions. That is why many of them are willing to offer discounts to young drivers to get and maintain good grades. They know that a student working hard enough to maintain straight A’s is one less likely to be off drinking and partying; that also makes them less likely to have an accident or get a ticket.
Tip 7 – Encourage Young Drivers to Maintain a Good Credit Rating
Did you know that in most states insurance companies have the legal right to consider credit ratings when determining insurance rates? It’s true. For many insurance companies the idea of the credit rating is a gauge of how likely a consumer is to miss his insurance payments.
If you’re not sure how this is beneficial to an insurance company just consider what the point of a credit score is. The idea of the credit score was developed in the 1950s as the result of mathematical computations researchers believed could determine how likely someone would be to default on new credit within six months.
Since then, credit scores have proven to be fairly accurate in their predictions regarding individual consumers. The lower your credit score, the more likely you are to default on new credit. Insurance companies consider this in order to manage their own risk.
Keep in mind that most states regulate how insurance companies can utilize credit scores in determining insurance rates.
According to the National Conference of State Legislatures, 26 states introduced new legislation in 2011 to further regulate how credit scores are used by insurance companies.
Application to Adult Drivers
Perhaps you’ve noticed through our list of tips that some of these things apply to older drivers as well. For example, the credit score issue may be more important to drivers over the age of 45 than those younger than 25. Why? Because the older we get the more opportunities we have to damage our credit ratings.
If an insurance company considers the credit rating of a young driver to help determine rates, it is likely they are doing the same thing with older drivers. So if a 45-year-old driver has a long history of credit problems they may negatively impact his insurance rates.
Another important tip that also applies to older drivers is that of driving safely and legally. In fact, safe driving is the single most important thing you can do to keep your insurance rates in check.
With every passing year you keep a clean driving record, you are showing your insurance company you pose less of a risk.
In the end, finding the best car insurance for young drivers is a matter of doing your homework and applying some common sense. If you and your young driver work together to make sure you follow the tips we’ve offered here, you should have no trouble finding great insurance at a great price.
If you’re ready to start searching for the best auto insurance policies online, be sure to enter your ZIP code into our FREE search tool below!