Adding a Teen to Your Car Insurance Policy? – Here are 6 ways to Keep the Costs Minimal

Learning to drive and getting a car is an exciting rite of passage for most American teens. However, as the parent of a new driver, this may not only be a nerve-racking time, but strenuous on your budget as well.

Because teens are inexperienced drivers, they are a high risk to insure. In fact, according to the Centers for Disease Control and Prevention, the risk of motor vehicle crashes is higher among 16-19 year olds than any other age group. Per mile driven, teen drivers ages 16 to 19 are nearly 3 times more likely than drivers aged 20 and older to be in a fatal crash.

As a result, a parent’s current insurance policy often skyrockets when they add their teen. However, these 6 things may help you keep more money in your wallet:

  1. Enforce Safe-Driving Habits

As the parent, and likely as the one paying the increased insurance rate, you are in the perfect position to teach your child to be a safe driver and enforce the rules you set.

Lead by example and avoid distracted driving. Children whose parents continuously drive while distracted with their phones, while doing their makeup, or eating etc., are more likely to drive that way themselves.

Set safe-driving rules to include things such as no cell-phone use, buckling up, and avoiding distractions such as eating, loud music and/or driving with multiple friends in the car at a time.

  1. Enroll in a Driver’s Ed Course

As a condition for getting a license/car, you can encourage your child to enroll in a driver’s education course. These are offered at many high schools or can be completed online at your child’s convenience.  Not only will this course hopefully teach your teen to be a safer driver, but many insurance providers offer a certain percentage discount for those who successfully pass the course.

  1. Report Good Grades

Statistics show that students who make good grades are less likely to get into a car accident. As a result, many insurance carriers view these teens as less of a risk and will offer savings. Some companies will even continue the discount for up to a year after the student graduates. Again, the exact savings varies from company to company.

  1. Opt for a Pay-As-You-Go Program

This method adjusts your rates based on the number of miles you drive. There are a couple different options with this, such installing a small device in the vehicle that records things such as breaking patterns, speed, time of day, music volume etc. – all things that may prove helpful to your teen (and to you) while he or she is learning to drive.

  1. Choose a Simple Car

As much as your teen may not like it, when buying your child his or her new car, choosing a simple, 4-door sedan will save you money on your insurance policy.  Cars with high horsepower and those considered “sports cars” tend to be more expensive to insure. These types of cars are likely to be driven faster and more aggressively, so insurance companies will be more inclined to charge higher rates because of the higher tendency for risky driving.  Also, cars considered “luxury vehicles” translate into higher repairs and costlier replacement parts, especially for foreign models, as a result, insurance on these cars is more expensive.

It’s always safest to make a list of 2 or 3 specific models you are considering and check with your insurance company to get an estimate of what it would cost to insure them.

  1. Shop Around for the best policy

As with anything, it’s always recommended that you look around at different policies and compare prices before deciding on one, or even before deciding to stay with the one you already have. Aside from offering different rates, discounts will vary from company to company so be sure to do your research and choose the one that’s best for you and your family.