Re-posted on 4/26/19

The day has finally come; your teen has gotten their driver’s license. Before letting them behind the wheel, it’s important to ensure that they are covered by an insurance policy. Unfortunately, there is a lot of confusion surrounding auto insurance for teens, and a lot of parents are concerned as to how adding their teen driver will affect their monthly premiums.

Your Auto Insurance Rates Will Probably Go Up

In the auto insurance industry, the entire pricing platform is based around risks and statistics. Using sophisticated algorithms, your insurer has evaluated how likely you are to file an insurance claim. Drivers who are statistically more likely to file a claim, such as those who have a less-than-perfect driving record or who own a car that is more likely to be stolen, will pay a higher insurance premium. Experienced drivers with clean driving records and vehicles with high safety ratings will generally enjoy the lowest premiums.

Statistically speaking, young drivers are the riskiest group on the road. Studies have shown that they’re more likely to exhibit dangerous behavior like speeding or texting while behind the wheel. Even the most responsible young drivers often simply lack the experience necessary to recognize dangerous situations and to make a swift judgment call to avoid causing an accident. With the combination of being more likely to exhibit risky behavior and a lack of experience, it’s no surprise that teen drivers aren’t cheap to insure.

There’s Good News

Fortunately, there are a few measures you can take to reduce, or at least offset, the expense of adding a teen driver to your policy.

Ask About a Good Student Discount

Good Student discounts can take a big sting out of that higher premium. In fact, you may be able to see a discount as high as 25 percent if your high school or college student maintains at least a B average. Requirements and discounts vary widely by insurance company, and your auto insurance agent can help you know whether your household qualifies for this discount.

Know Where to Cut Corners

If your child has their own vehicle that’s only worth a few hundred dollars, then it’s probably in your best interest to forgo collision and comprehensive coverage. Because it would likely only take a mild accident to total the vehicle, paying for that coverage may not make sense. Just don’t skimp on liability insurance; because an accident that your teen is responsible for could result in tens or even hundreds of thousands of dollars in damages to the other driver, you should carry the best liability coverage that you can afford.

Raise Your Deductibles

If your teen is not driving an older vehicle, and you want to make sure the vehicle is covered with comprehensive and collision on your policy (this fixes your vehicle), you could consider a higher deductible, because higher deductibles on a policy are less likely to file claims, they generally have lower premiums than policyholders with lower deductibles. Just be sure that you don’t raise your deductible higher than you could afford at any given time. If you or your teen did get into an accident and your vehicle required an expensive repair, you would not be able to get your vehicle back from the shop until you paid your deductible.

Are you getting ready to add a teen driver to your policy?  Give us a call to learn more about keeping your monthly premium manageable.

Related Articles:

Preparing Your Teen Driver

How Phone Apps are Fighting Distracted Driving

Texting While Driving

How Do Insurance Companies Decide Auto Insurance Premiums?

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