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Insuring a Teen Driver

Written By Pam Gaulin

Parents with teenage drivers will need to add their teens to their car insurance policies. Insuring a teen driver will also mean adding more overall coverage to your auto insurance policy since teens drivers are more likely to have accidents than other drivers. Insuring a teen driver will just take one simple phone call to your auto insurance company.

Early Birds

Parents should be ready to insure their teen drivers when teens acquire their learner permit.

You Better Shop Around

Not all insurance coverage for teen drivers is created equal. Auto insurance companies offer different rates for these high-risk teen drivers. Research the cost of adding the teen to your current car insurance policy. Compare the rate with that of other car insurance companies.

Also find out from your car insurance company when they stop considering the driver a teen driver. A driver may be classified as a teen driver through the college years, or even until they are 25. This may help you determine which car insurance company to use when insuring a teen driver.

One way to save money on car insurance when insuring teens is to use a car insurance company assigns drivers to specific vehicles in the family. Assigning your teen to a less-expensive, older car in the family is one way to insure a teen driver without facing a huge premium.

Lowering the Deductible

When you insure teen drivers it is also in your best interest to lower your deductible amount. Make your teen responsible for the deductible amount if they are involved in an accident. A deductible may be set as low s $100. The premium will be higher, but your out-of-pocket expenses will be lower if the teen is involved in an accident.

Consider A Separate Policy

Parents can insure their teen drivers on the teen's own auto policy if that will save the family money. When shopping around for an auto policy price for a teen driver, price out this option to see if it can save you some money.

Be Prepared for Increased Premiums

Adding a teen driver to your car insurance policy will increase your overall premiums. Be prepared to pay 50 percent to 200 percent more than you do now.

Discounts for Technology

Some insurance programs may offer a car insurance discount when parents install teen driver monitoring devices in their vehicles. Find out if your auto insurance company offers this type of discount.

Smart Teens Save You Money

Encourage teen drivers to get good grades as an incentive to driving. Car insurance companies sometimes offer discounted rates for students based on their grade point average. Teen drivers who maintain B or better averages can save their parents between 10 percent and 25 percent on the cost of insuring a teen driver.

Require teen drivers to pay a percentage of the car insurance cost, in order to teach them financial and personal responsibility. When the teen is aware that their academic performance as well as their driving track record affect how much money they pay for insurance, they will study harder and drive safer. It's a win-win situation for the teen's safety and education.

Driver's Education is a Worthwhile Investment

In addition to being a good way to teach teens to drive, investing in a driver education course is also a good way to save money when insuring a teen driver. Auto insurance companies give parents a discount when they insure teens who have completed a driving training course.

Insurance Cards and Policies

Once your teen is insured, give them a copy of the insurance card to carry with them when they drive. Also, key in the phone number of the car insurance company in the teen's cell phone.

Sources

Insurance Information Institute
http://www.iii.org/media/hottopics/insurance/teendrivers/
http://www.iii.org/individuals/auto/b/teengage/

BankRate.com
http://www.bankrate.com/brm/news/insurance/teen-auto-insurancea1.asp

Allstate.com
http://www.allstate.com/tools-and-resources/insuring-teen-driver.aspx

MSN.com
http://articles.moneycentral.msn.com/Insurance/InsureYourCar/CutTheCostOfInsuringYourTeenDriver.aspx

NAIC.org
www.naic.org/documents/consumer_alert_teen_driver.pdf

Insurance.com
http://www.insurance.com/quotes/article.aspx/Insuring_a_Teen_Driver_in_Single-Parent_Home/artid/516

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