Auto Insurance for Teen Drivers...Avoid Costly Mistakes

Do you need auto insurance for a learner’s permit?
February 15, 2017
What you need to know when you rent a car
March 7, 2017
Show all

Auto Insurance for Teen Drivers…Avoid Costly Mistakes

Adding a teenage driver to your insurance will inevitably cause your rates to go up.  However, the amount by which they increase is not a foregone conclusion.  There are steps that you—and your teen driver—may take to try to keep the additional costs to a minimum.  Here’s more information to help you make decisions.

Keep the Speed Down

The number one thing that will cause auto insurance rates to increase is tickets.  Whether speeding tickets, tickets from careless or reckless driving, or some other moving violation, all will have the same result: higher insurance premiums.

Car accidents are the leading cause of death among 15- to 20-year olds, and in 35% of those accidents among males, the primary cause is speeding.  Help protect your teen by choosing a vehicle built for safety, not speed, which may cost less to insure and could save lives.

Make Sure the Insurance Agent Knows Who Is Driving What Car

Many insurance companies let you assign a driver as a primary driver to one vehicle and a secondary driver to other vehicles.  This prevents your teenager, usually the most expensive driver to insure, from being assigned to the most expensive car to insure.  If you have multiple cars, make sure your teen driver is assigned to one of them.  If you fail to designate him/her as the primary driver of a car, your agent may just assign him/her as the primary driver of the most expensive car you own.  The result will be a steeper increase in premiums than you otherwise would have encountered.

Research the Discounts You Can Get

Many insurance companies offer a discounts for teen drivers.  Unfortunately, far too many parents are unaware of this and tend to miss out on what could end up being some significant discounts.  Talk to your independent insurance agent and find out what discounts your teen could get.

  • Good Grades– If your child has a B average or better, you may be eligible for a good grades discount. Tip: Update your insurance company on a yearly basis on your child’s status or else the discount could be removed without notice.
  • Driver Safety Classes– Discounts and programs vary widely but some insurance companies offer discounts if your teen passes an approved driver safety course.
  • Living more than 100 miles from home– If your teen is in college more than 100 miles away without a car of his/her own, let your insurance agent know. Most companies will give you a discount since your teen is not driving on a regular basis.
  • Home Insurance Bundle – The biggest discount available by far is the auto and home insurance  Discounts get up to 20%.

Consider Titling the Vehicle in Your Name

If you teen has their own car, parents often want to title the car in the teen’s name, thereby making him/her solely responsible for paying insurance, taxes, and so on.  While this is admirable, it can also end up costing a lot more.  A teen who pays for insurance for a vehicle of which he or she is the sole owner will almost always pay more than one who is listed as an additional driver of the same vehicle.

Raise Your Liability Limits

While you probably want to keep your insurance premiums as low as possible, it just makes good financial sense to increase your policy limits for liability insurance.  This is because teen drivers are the number one risk group when it comes to car accidents.

What’s more, when a teen does get into an accident, it is likely to be more costly than when someone who is older and is a more experienced driver has an accident.  That’s just the facts and, while you may not like them, they will ultimately impact your wallet if you don’t prepare for them.

Consider a policy with higher liability limits, at least for your teen driver.  You’ll pay a little bit more now, but you’ll avoid a huge cost in the event that he or she does have an accident.

Somewhat along these lines, consider purchasing an umbrella policy.  An umbrella policy is “extra” insurance that kicks in when your primary policy is exhausted.  By paying a little more now, often less than a dollar a day, you’ll avoid the potentially disastrous consequences if your teen gets into an accident and is found at fault.

Also, consider adding uninsured/underinsured motorist insurance.  Yes, everyone on the road should be insured; yes, they should carry enough to cover whatever happens.  But the fact is that many people don’t, and you don’t want to be left holding the bag—through no fault of your own—if they cause an accident.

Contact Foundation Insurance Group today

The insurance professionals at Foundation Insurance Group, located in Falls Church, Virginia, and St. Matthews, Kentucky are always available to review your current auto policy and answer questions.  Follow these tips, and be safe, and you’ll find your wallet a little bit fuller from your efforts.

Comments are closed.