Ah yes, your teen is finally behind the wheel, which allows you to hang up your hat as the resident chauffer. But in addition to that newfound sense of freedom for both parent and teen, comes a new pinch in the pocketbook.
It’s true, parents of teen drivers typically incur an increase in their car insurance premiums. But we have some tips on ways to save that can offset the cost of having a young driver on your auto insurance policy.
Choosing a Vehicle for Your Teen Driver
One factor that can affect your rate significantly is whether your child will have their own car. There is a substantial savings in having a new teen driver share the family vehicle rather than giving them a car of their own. In addition to having one less vehicle to carry on your policy, sharing a car means they will spend less time driving because of limited access to a vehicle.
Should you choose to get your teen their own vehicle, the type of car you select can affect your premiums considerably. Your independent insurance agent can help you determine which models cost less to insure, but considering these factors may help you narrow down your choices:
· Drive a used car. While a brand new car may seem the safest choice (if cost isn’t an issue), it is often the more expensive route when it comes to car insurance. A newer used model can be one way to get a reliable vehicle while keeping your rates in check.
· Safety rankings count. Whether you are considering new or used, it is a good idea to check the safety ratings. Having your teen at the wheel of a safe car will affect your premium as well as your peace of mind.
Tips for Offsetting the Cost of Insuring a Teen Driver
Aside from the type of vehicle your teen is driving, there are other areas to look for savings:
- Raise your deductible. This generally lowers your premium and helps prevent you from filing small claims, which affects your rates.
- Evaluate the value of older vehicles. You may be paying more in premiums than you can get back from the insurance carrier in the event that car is involved in an accident. If that’s the case, you might want to consider dropping the collision and comprehensive coverage for that vehicle.
- Consider combining policies with one insurer. Most insurance companies offer discounts if you purchase both your homeowners and car insurance from one carrier, if you don’t do so already.
While you may be tempted to cut back on your liability coverage to offset the cost of adding your teen to your auto insurance policy, in the long run it may not be the wisest choice. Statistics show that teen drivers are more likely to get into accidents than older drivers. In the event of a serious accident, having less liability coverage than needed would leave you footing the bill for anything beyond your liability limits, putting your financial security at risk.
You Can Find Teen Driver Discounts
Consider these additional ways to save on car insurance directly related to having your teen behind the wheel:
- Wait a year or two. While it’s not always a popular choice, having your child wait until they’re 17 or 18 to get their license can lower the cost of insuring a new teen driver.
- Driver training programs. Driver-safety programs are not only a way to teach your teen driver safe driving habits, but in many cases, they can reduce your insurance premiums as well. In addition, some programs offer GPS and video capabilities as a way to monitor your child’s driving habits when you’re not with them.
- Maintain good grades. Teen drivers who maintain a B average or higher are generally eligible for a discount with most insurance carriers.
Like most major purchases, some insurance companies offer better rates for teenage drivers than others. If the savings is significant, it may be worth switching from your current carrier. On the other hand, if it is a nominal savings and you’ve been with your insurer for some time, it can be worth staying put. In the event of an accident, your long-term relationship goes a long way toward goodwill. It could potentially save you from a rate increase or being dropped altogether.
Also, switching insurance companies may affect your homeowners insurance rates if you are currently getting a multi-policy discount.
Getting the Coverage You Need
While adding a new teen driver to your auto insurance policy can raise your rates, there are ways to save without sacrificing coverage. Let us help you design an affordable, dependable policy that fits your family’s needs and pocketbook. Contact us today at (804) 320-2886 or [email protected]