As children begin to get older, the dream of driving begins to become more real. As a parent, this means revisiting your insurance policy if the new driver will be operating a vehicle by himself or herself. While this can be an exciting time for your teenager and stressful time for the parent, it is crucial to remain calm and fully explore all options to ensure that the child is fully covered. When adding a teenager to your auto insurance policy, this can often mean that premiums will rise significantly due to the high risk associated with young drivers. Still, there are steps that can be taken to make sure rates are as low as feasibly possible.
Teenage Drivers on the Road
Parents have a right to be concerned when their son or daughter hits the highway. The National Highway Traffic Safety Administration reports that drivers under 25 are four times more likely to die in a car accident versus their older counterparts. The Center for Disease Control and Prevention states that the leading death among teenagers is vehicle accidents. This is enough to make any parent nervous, and insurance companies are well aware of these statistics.
When adding a teenage driver to your policy, it is unavoidable that insurance policies will increase. Loretta Worters, a spokeswoman for the Insurance Information Institute, says that at times, increases of 50 to 100 percent are not unheard of. This is an extreme hike for parents who may have enjoyed years of low premiums due to safe driving. The fact is that teenage drivers are a high-risk demographic, so by insuring them, the insurance company is taking a chance that they may have to pay a large sum of money at some point.
How to Monitor Insurance Costs
Inform the Insurance Company
As a parent, there are several steps that you can take to make sure your premiums are as low as possible. First of all, make sure that the insurance company is aware there will be a new driver in the household. If this doesn’t happen and the teen is in an accident, insurance companies may handle it in several different ways. Some may extend coverage. Others may honor claims but then backdate premiums and charge the parent for the entire time that the teen has been licensed. In the worst-case scenario, the Insurance Information Institute warns that some insurance companies could consider letting a teenager drive uninsured is misrepresentation, and coverage could be denied completely. In the end, it is better to be upfront with your insurance company.
By raising deductibles on the comprehensive and collision policies, this lowers premiums and can prevent multiple small claims, which dings your policy each time. It is important to remember that liability coverage is of the utmost importance. This is an area where you should not try to lessen just to save money.
Buy a Safe Car
Don’t buy your child a Mustang or a Camaro or another car that is expensive to insure. Insurance companies appreciate safe vehicles, and it may ease their mind slightly knowing that a teenager can’t go from 0-60 in 3 seconds. Parents will also be more likely to let their children drive on his or her own if insurance rates aren’t through the roof and their child is secure in a safe car.
Drop Collision and Comprehensive on Older Cars
Some families may have an older car that has been kept for various reasons. Once a teenager starts driving, revisit the policies and information for these older cars. Check the value of the vehicle. It is possible that the insured could be paying more in premiums for an older car than it is actually worth.
Teenagers that have good grades can be eligible for discounts from some insurance companies. This can even extend into college.
Leaving the Nest
If a teenager graduates from high school and goes to college while still on your auto insurance policy, it may be time to look at revising again. If they go further than 100 miles away, it is possible to get a discount on yearly premiums but still have them covered. This way, money is saved, and the teenager is still covered. Discounts are available because if the teenager is not at home and driving a car, there is less risk that he or she will be in an accident.
Talk to the Insurance Company
If a parent is willing to speak with an insurance company and explore the options that they have to offer, they may be surprised. Some insurance companies can provide an additional discount if a teenage driver takes a particular safety driving course or agrees to study for a particular test. Today, teenagers are busier than ever; however, if a day can help lower the over premiums, it may be worth it.
Also, be sure to ask the insurance company if combining policies will provide a discount. This means if an individual has homeowners and automobile insurance with the same company, sometimes a discount can be offered.
If staying with your current insurance company will not save money, be sure to shop around to find the best price for a teenage driver. Search for a policy that will be wallet-friendly but more importantly, protects the child that is behind the wheel.