Parenting is one of life’s most rewarding experiences, but it certainly isn’t inexpensive! As you transition from diapers and formula to sports fees, tuition, music lessons, summer camp and more, parents of teenagers know the value of a good discount better than anyone. And you might not ever appreciate a discount as much as you do when your teenager starts driving.
Studies have shown that adding a 16-year-old driver to your car insurance policy can raise your premium by an average of 78 percent. The good news? Many insurers offer discounts to help offset the cost of insuring a teenage driver. Don’t let sticker shock get the best of you!
Why Teenage Drivers Cost More to Insure
Insurers use insurance scores much like lenders use a person’s credit score. In other words, your insurance score will provide a baseline assessment of your “risk.” Riskier scores typically result in higher insurance rates, while lower risk translates to a lower price point.
FYI: The nationwide average car insurance premium for a 16-year-old driver with minimum coverage in the United States rings in at $2,593.
Teen drivers between the ages of 16 and 19 years old represent the riskiest age group of all drivers. According to the CDC, this age group is involved in more car accidents than any other. Teenagers are typically classified as “high risk” until the age of 25, at which time they may finally start to notice the cost of their auto insurance going down – assuming they have a clean driving record, of course.
So, your teenager is locked into a “risky” driving category for the next several years. What can you do to save money in the meantime?
How to Save Money on Car Insurance for a Teen Driver:
1. Put your teenage driver in a safe vehicle.
While your teenager may have their eyes on a luxury sportscar, the choice of their first vehicle is an important one as it can directly influence the cost of their auto insurance. Insurers typically reward the choice of a vehicle with safety features, such as:
- Air bags
- Anti-lock brakes
- Automatic seatbelts and/or seatbelt alarms
- Power steering
Your insurance agent can calculate a free, no-obligation rate quote while you are car shopping, to give you a better idea of what to expect. It definitely pays to do your homework and find out how much it would cost to insure your teen in a hand-me-down sedan vs. a brand new SUV before you make any big purchases!
2. Encourage your student to earn (and maintain!) good grades.
This one’s a no-brainer for parents of high school and college students. Hit the books! Some insurers offer a discount for good grades that can be anywhere from a 5 to 25% discount. For a $2,400 policy, that could translate to a savings of up to $600!
In order to qualify for a “Good Grade” discount, the driver is typically required to maintain a “B” average while being enrolled as a full-time student. Note that not all insurers offer this discount. The ones who do base their discount on the fact that teenagers with good grades tend to be better and safer drivers.
Ask your insurance broker if your student qualifies for a “Good Grade” discount on their car insurance policy.
3. Complete a Driver’s Education course.
Speaking of good students: Insurers commonly reward teenage drivers who complete a Driver’s Ed course with a 5 to 10% discount.
Some insurers, like Liberty Mutual, offer their own safe driving program through the company’s mobile app. Others will accept documentation of course completion through your teen’s high school or an online program. Driver’s Ed courses are commonly offered for free or for a low cost to help encourage participation. So what are you waiting for?!
4. Consider bundling into a family policy.
On the surface, it may seem like a great lesson in financial responsibility to have your child pay for their own individual auto insurance However, you may want to rethink that strategy for a couple of reasons.
- First, an individual policy for a single driver is all but guaranteed to be the #1 most expensive option for your child.
- Second, bundling multiple insurance policies under one account will earn you a bundle discount. So while you’ll be taking on the added cost of another driver (and a “risky” one, at that) you will all be saving money in the long run.
By the way: Just because your teenage driver does not have their own individual policy does not mean you can’t ask them to pay for some or all of the costs to insure them. We’ve got your backs, Mom and Dad!
5. Tell your Insurance Agent about specific driving habits.
At Webb Insurance, we hope you’ll think of your insurance broker as a family friend and trusted advisor. As such, it may be worthwhile to share more information about your teenager’s driving habits, particularly if they are driving infrequently.
Some insurers offer a “Student Away” discount. Your child may qualify if they are attending a college or university more than 100 miles away and do not have a car on-campus. They may also qualify for an “Occasional Driver” discount if they are using an insured vehicle for less than 25% of its annual mileage. However, it is very important to make sure that you do not claim any discounts that would leave your teen driver uninsured or underinsured. Contact your insurance broker to learn more.
6. Shop around for Car Insurance with free quotes.
In the insurance world, it never hurts to ask. Ask for free quotes, ask if you are eligible for any discounts, and compare rates to get the best price!
Credit scores can sometimes be “dinged” for making multiple inquiries in a short amount of time. Fortunately, getting free quotes from multiple insurers has NO impact to your insurance score. So ask away!
Get a free quote on car insurance with no obligation to purchase.
7. The ultimate savings: SAFE DRIVING!
We’re passionate about helping you get the right coverage for the right price – but your safety is our top priority. It goes without saying that the best way to save money on car insurance at any age is to have a clean, safe driving record free of accidents and previous claims for car damage.
Your teenager looks up to you as a role model. Remember to model safe driving behaviors throughout their lives, and not just when they are approaching driving age. And by the way: Don’t text and drive!
Get the Best Insurance Coverage For Your Teenage Driver
Webb Insurance in St. Charles has been helping families protect themselves on the road for more than 35 years. As an independent broker, our agents can provide a free, no-obligation rate quote from multiple top-rated insurance carriers to help you find the best auto insurance coverage for the best price. And we will work closely with you to help you feel confident that your insurance covers everything it is supposed to.
As your family grows and changes, so do your insurance needs. Contact your friendly local insurance broker to schedule a free meeting over lunch or coffee, or submit a request for a free car insurance quote online.
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