UPDATED: Aug 10, 2020
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It can be an exciting, yet somehow stressful time when your teen passes their driving exam. Despite the recent passage of Graduated Driver Licensing (GDL) laws, teenage drivers still have the least amount of experience on the road.
Car insurance rates for young drivers — including teens and drivers under 25 — are among the most expensive.
You’re right to worry about what their driving habits will turn into, and about their ability to react to reckless drivers on the road. As you hand them your car keys or hand them car keys of their own, they will need to be insured.
Car Insurance for Teenagers
So: why exactly are teenage driver insurance rates so expensive? Statistics have shown that teenagers have a much higher propensity to be in accidents than any other demographic. Furthermore, the Insurance Institute for Highway Safety shows that automobile accidents are the biggest cause of teen deaths. Because of these statistics, the teenage driver in your life will most likely also have to deal with paying higher premiums.
But there are certain things that you can do to lower your teenage driver’s premiums. We’ll discuss them in more detail below.
Teenage Car Insurance – Lowering Your Monthly Premium
Shopping around is the best thing that you can do. Finding the adequate balance between service quality and price comes with time. Consider whether or not you want to start a new teen driver insurance policy for them or just add them to your own.
Generally adding your children to your own policy is cheaper. It will raise your premium considerably, but in most cases it will be less than getting them their own policy. You are eligible for various discounts like being a homeowner, being married, or perhaps insuring several cars with the same policy. Your children are not.
Bear in mind that if your teen is doing well in school, various insurance companies offer a discount for maintaining a certain grade point average. Having a car with good safety ratings could also go a long way to reducing your premiums.
With the right company, a little sleuthing, and teenager-specific discounts (like Driver’s Ed or Good Student Discounts), you too can find a more affordable rate for your young driver.
Insurance for Teenage Drivers – Discuss Car Privileges
- Talk to your teen about the risks of driving, and the rules you want to impose. Be proactive and take a direct role in influencing their driving etiquette.
- Reduce the amount of distractions in the car. Until they get more experienced, limit the amount of passengers allowed in the car with them. Demand that they not use their phone while driving in any way, a lot of accidents come from distracted drivers who were talking or texting.
- You might try imposing area and time limits on your teen. Tell them when and where they can drive the car. Perhaps have them return the car home before a certain hour, or not allow them to drive during rush hour traffic. If there’s a special occasion have them ask you for permission.
- Lastly, it’s important to make certain your teen knows the law. Even though they passed their test, there have been many changes to driving laws in the past few years. Cell phone laws, for example, have banned texting while driving in nearly every state. Talking on a hand-held device while operating a vehicle is also illegal in many states now, too. Drunk driving penalties are severe, and underage drinking (especially while driving) is illegal. Have a talk with your teen, and make sure they know your state and local laws.
Just remember to hang in there; rates will eventually drop over time as your teen gets better behind the wheel. The first decrease in premiums should be seen at the age of 19, followed by another reduction at the age of 21. It’s only a matter of time.