There are many challenges parents face when their children become teenagers. When they start to drive, not only do they worry about them being behind the wheel of a car, they also need to be concerned about the cost of their insurance.
Your Rates Will Go Up
Insurance premiums are calculated based on the risk of accidents. Because teens are at a higher risk of getting into accidents, rates will increase by approximately 78 percent.
Accident rates for teens between 16 and 19 years old are higher than for any other age group. As responsible parents, you should talk to your children about safe driving habits.
Teaching by example is always a good first step. Show them how to drive defensively and how to be cautious of other drivers on the road. Make sure they are good and safe drivers before you hand over the car keys. According to Geico, about seven percent of 16-year-olds are likely to be involved in a car accident their first year as a new driver.
You might be tempted to stay with your current auto insurance company and just add your child. However, before purchasing car insurance for teens, you might want to shop around. All companies calculate premiums differently and have different discounts and savings opportunities.
Lower Rates for Students
You might not think doing well in school has anything to do with car insurance rates, but it does. Some insurance companies offer discounts for students with a high GPA and good attendance. Another way to reduce the rate is to take a safe driving class or driver’s education course. Do your research and see which companies have these types of discount programs. You might even be able to negotiate lower rates than advertised.
In addition, ask the insurance provider if they offer programs that allow you to take your teen off your insurance while they are away at college and not using the family car.
Assign a Specific Car or Buy Used
The cost of insurance depends on many things including what type of car you are insuring. More expensive and luxury cars cost more to insure because the price for repairs and replacement is also higher. Not all insurance companies will assign cars to specific drivers, but it pays to ask as it can save you money.
If your teen is going to buy his own car, encourage them to purchase a used one. Of course, you want to make sure that the car is reliable and safe. Insurance rates are based on the make, model, and age of a car. The premiums for older cars are less than insuring new ones.
It’s also best to find a car that has safety features such as airbags and anti-lock brakes. Insurance companies offer discount premiums when your vehicle has them.
Add Your Teen to Your Insurance
It is usually less expensive to add your teen to your policy than for them to get their own. Age is one of the main variables used to determine insurance rates. Teens have little to no credit history, a limited driving record, and a higher probability of getting into an accident. If they were to get their own insurance, the cost would most likely be astronomical. You can still teach them about how to be responsible by having them pay their portion of the insurance premium.
Understand the Requirements
The state where you live dictates the type of coverage you need to purchase for your teen. Some states require teens to be covered when they get their learner’s permit. Whereas others allow them to be covered under your plan until they get their license. Liability insurance is needed in many areas to cover damage caused by property, vehicles, and bodily injury.
When your teen gets their license and you have them covered, they should continue learning responsible and safe driving habits. It’s an ongoing process as they get more experience on the road. Not only will it reduce the chances of getting into an accident, but it will also help your insurance premiums. Your insurance premiums will go down over time the longer your child drives without having an accident.