Auto Insurance for Teens

Your son has just gotten his driver’s license and is feeling that sense of freedom that comes along with it.  Car fever is spreading through his junior class like wildfire.  He gets behind the wheel and drives away, leaving you gazing out the window with a worried look on your face—there are maniacs on the road; will he be safe?  How much more am I paying in insurance premiums?  You have every right to worry about his safety, but know the facts and your options regarding insurance coverage for your teen, and you will worry a little less—at least about the premiums.

Auto insurance companies know a secret and that secret can cost parents of teenagers dearly.  The secret is that teen drivers have the highest crash risk per mile traveled, compared with drivers in other age groups.  The problem is worst among 16-year olds, whose driving experience is the most limited and whose immaturity often results in risk-taking.  Motor vehicle crashes are the leading cause of death for teens in the U.S., accounting for more than one in three deaths in this age group.  The risk is highest among males, and higher still among teens driving with other teens in the car.  

I’m not telling you this to scare you.  (I know you were already scared for your child.)  I’m telling you this because these are the statistics insurance companies use when they decide to charge up to twice as much to cover a teen driver as an adult driver.  Auto insurance companies spend less money on older, more responsible drivers. This is because these adult drivers are less likely to be involved in an accident, which saves the insurance company money. Younger drivers are less experienced and are proven to cause more accidents. Statistics show that teen drivers are significantly larger liabilities to insure.   

So how can you get around paying almost double your current insurance premium to keep your darling daughter in the driver's seat?  You will pay more, but you can minimize the impact.  Here’s how:

• Emphasize safe driving - Stress to them how important it is for them to keep a clean driving record. That means driving safely – no speeding tickets, no traffic violations, and no accidents. Over a period of time, their safe driving will be rewarded with lower premiums.
• Purchase insurance with a higher deductible - The higher the deductible, the lower the premium.
• Choose a vehicle for its safety features, not its speed -  If you are purchasing a vehicle for your teen, choose one that is built well with extra safety features, like air bags and anti-lock brakes, and do not select one that falls into a sports class, which is typically less safe, and at a higher risk rating class.  Stay away from the Mustangs and stick to the Civics, for example.
• Consider purchasing a “stand alone” policy from an agency that specializes in providing teen insurance - A “stand alone” policy means they are not added as an additional driver on your insurance, but rather carry their own insurance.  Providers of teen auto insurance reduce their risk by placing certain restrictions and requirements on the driving habits of the teen they are covering, such as attending driving school, no driving after dark, no giving rides to other teens, and various other rules which allow them to keep the rates lower for teenage drivers.
• Be sure your teen is doing his best in school - Most insurance companies give a sizable discount if your son or daughter can provide a copy of his or her report card that shows over a 3.0 grade point average.  A bigger discount may be available for your 4.0 student.
• Complete a defensive driving course - Some insurers provide defensive driving courses on-line or on DVD.  AAA, for example, offers a course called TeenSmart, and proof of its completion reduces the premium for your teen significantly.
• Add your teenager as the primary driver on your family’s oldest or cheapest car, instead of as an additional driver on a newer car. 

The easy thing to do, of course, is to just add your teenager onto your existing policy, but it is a better idea to take the time to shop around for the lowest rates first and keep the tips above in mind.  Then pay your premium and always have your son or daughter call you when they arrive at their destination.