Teens & Car Insurance: How to Cut Costs


For a parent, it’s a bittersweet moment when a teenaged son or daughter gets behind the wheel for the first time. It’s exciting to see a child grow up, but frightening to think about the dangers of the road.

And insuring a teenage driver can be brutal for the wallet, sometimes doubling the family’s premium. There are, however, a few ways to trim the premium at the start, as well as precautions to prevent it from skyrocketing later.

Typically, you won’t pay any more when your teen is driving with a learner’s permit, as there will have to be an adult in the car. But the child will have to get a policy or be added to the parents’ policy as soon as the driver’s license is issued.

Generally, it’s cheaper to add the child to the parents’ policy than to take out a separate policy, though this would be a question to explore when you shop around.

Insurance premiums are based on a long list of factors. It’s more expensive to insure any driver who lives in a congested urban area where accidents, theft and vandalism are more likely. But since most families are not likely to move to the suburbs or country just to reduce auto insurance costs, other strategies may make more sense.

First, avoid getting an expensive new car. Since the insurer will assume the teen will drive the car even if there are others, it will boost the premium.

Second, avoid getting an additional car for the teenager’s sole use. If a one-child family with two parents has three cars, for example, the insurer will assume one of those cars is for teenager’s full-time use. The insurer considers a full-time driver riskier than a part-time one.

It will be cheaper to have the teenager listed as a secondary driver for the least expensive vehicle the family owns, though that will not prevent the teen from driving other vehicles, or restrict the amount of driving.

Passing a driver’s education course approved by the state will also reduce the teen’s insurance premium, as will good grades. Good students are not necessarily better drivers right away, but they tend to become more desirable customers later, so insurers like to start building customer loyalty early.

You can also reduce premium costs by raising your deductibles, or the amount you have to pay before a claim will take over. Some experts suggest not filing claims for minor fender benders, to avoid an increase in the premium.

Once the teen starts driving, the family should focus on avoiding incidents like tickets and accidents that can drive premiums up. That obviously means no drinking, talking on the cell phone or texting while driving.

The risk of accidents can also be reduced by barring the teen from chauffeuring a carful of raucous friends. One friend at a time is enough. Some families also place restrictions on driving during accident-prone times like Friday and Saturday night. Even simple things can help, like keeping windows and mirrors clean, and keeping the tires at the proper pressure so the vehicle handles well.

And remember there’s nothing to prevent a parent from insisting on a touch-up driving lesson from time to time, to make sure the teen isn’t getting sloppy or over-confident. People who have been driving for six months or a year may take more risks than beginners who adhere to all the rules.

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