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5 Ways to Lower Insurance Costs for Teens

Sticker Shock when insuring a teen driver is common, but how can you and your teen save?
1/16/2015

The reason teens are so expensive to insure is because they are at a higher risk for an accident. Insuring a teen driver can increase your premium, but you and your teen driver can keep the costs as low as possible.

 

1. Add them. When your teen passes the driving test and earns that driver’s license, it’s time to add them to your policy. While they could purchase their own policy, in total, it is usually less expensive to add them to their parents’ policy. Most insurance companies offer discounts for multiple cars and drivers, which can help you save. 

2. Teach your teen safety. Teach your teen to always wear a seatbelt; stay away from the distractions such as switching through music and staying off the cellphone (in some states it’s illegal for a teen driver to use a cell phone at all while driving); and to be an aware, defensive driver. Most states require a number of supervised driving hours or have graduated driver’s license (GDL) laws - surpass those and supervise as much as possible. The more supervised driving your teen does, the more they’ll be prepared for driving alone. If your teen receives a speeding ticket or gets in an accident, your rates will sky rocket.

3. Don’t buy the flashy sports car. The car your teen drives also factors into the price of insurance. An older, reliable, small to mid-size car is usually the least expensive to insure and to fix. You can also consult with your independent insurance agent on which makes and models are the cheapest to insure. If you don’t plan on buying your teen a car, they still have to be insured if they plan on driving. Talk to your insurance agent about your teen being an “occasional driver”, which could lower your rates, especially if they plan to drive the least expensive car available to them.

4. Honor students are cheaper. Academic performance's impact on premium is a great way to save money and encourage good grades. A “B” average or higher can save you up to 30 percent off your insurance, depending on your carrier. It doesn’t hurt when shopping for college, either. 

5. Education pays off. If your teen receives more driver’s education than is required, you could receive a discount on insurance. Although extra schooling will cost more, it’s ultimately worth your teen’s safety. According to the Centers for Disease Control and Prevention, auto crashes are the leading cause of death for U.S. youths between the ages of 15 and 20.


Although it won’t save you money, monitoring devices are a new way to track your teen’s safe driving, or lack thereof. These will notify you if your teen is speeding or driving recklessly. They also connect with your teen’s cell phone, to make it unusable while the car is in operation. In addition, you can see where they drove to and at what time, which could potentially make your teen never want to drive again. Then you could really save money!

 

Keeping your teen safe while they drive is most important, and the National Highway Traffic Safety Administration (NHTSA) has created the “5 to drive” campaign, “which encourages parents and guardians to set clear rules related to some of the riskiest behaviors associated with young drivers before they get behind the wheel.” According to NHTSA, GDL programs can reduce your teen’s crash risk by as much as 50 percent.  

 

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