Have you added a teenager or young adult to your insurance? Teen driver insurance is a tricky topic to understand
Has your insurance premium gone up significantly?
Most parents when they add their child for the first time to their policy are surprised to see their insurance premium has gone up by 100% +. If you have more than one teen driving child then your rate may go up by 250% +.
In the article below we have shared tips that can help you in reducing your car insurance premium. We have also discussed insurance discounts for teenage drivers.
Tips for Reducing cost on teen driver insurance
1. Compare rate with multiple insurance companies:
Most insurance buyers go to 3-4 insurance company websites they have heard on overpriced TV commercials. Then they enter the same information on those sites again and again to get insurance quotes. They compare those 3-4 quotes and buy the cheapest one.
There are 100’s of insurance companies and if you had compared with say 25 top insurance companies then you may have got a better rate. But it will take a lot of time on your side and you will have to input the same data on 25 different sites.
Hence the best option is to get an independent insurance agent who will compare rate and coverage with dozens of insurance companies.They will not only help you in getting the best rate but also help in picking the right coverage for your needs.
CoverClan can help you in finding the best independent insurance agent for you.
2.Good grade discount:
Ask your insurance company if they provide discounts to teenagers with good grades. If your teen has good grades then this can help in reducing the rate.
3.Driver training classes:
Your insurance company may offer a discount if your teen takes certain driver training classes.
4.Having car with safety features:
Many insurance companies provide discounts if your car is equipped with safety features like anti-lock brake and anti theft devices. If you are planning to buy a new car then you may want to look for a car with safety features which help in reducing insurance rate.
5.Installing a monitoring device
Nowadays many insurance companies are coming with monitoring devices which can be installed in your car. These devices measure driving behaviour and offer discounts to good drivers.
There are also pay per mile kind of insurance providers where your insurance premium depends on the number of miles you have driven. You will have to install a telematics device provided by the insurance company but this can save a significant amount on your car insurance.
6.Increase your deductible
Deductible is the amount you pay first for a claim before insurance starts paying. Hence currently if you have deductible of say $500 then you can increase it to $1000 and reduce your monthly premium significantly.
This also prevents you from filing small claims and keeps your claim history clean. You can put some extra amount in your emergency fund to pay for this increased deductible.
7.Inform insurer if your child has moved away
If your child has moved to a school more than 100miles away from your house and has not taken a car then you should inform your insurer. Many insurers provide huge discounts and your child will still have coverage when back home for vacation.
8.Getting multiple policy discount
If you have your home/auto or any other insurance with multiple insurers then you should look at combining them with one insurer to get multiple policy discounts.
Since teens and young adults are at high risk for accidents it is a good idea to get an umbrella policy as well.
What not to do when you add a teen to car insurance
1.Buying a car for teenager and putting them in their own policy
This option will cost you multiple times more than adding a teen to your car insurance. It is better to add teen to parents policy compared to having a separate policy for teens.
2.Reducing insurance coverage
Sometimes people try to reduce their insurance premium by reducing insurance coverage they have on car. Not having sufficient insurance to cover an unforeseen event is more risky compared to the amount you save on premium. You may save for example $50 on your insurance premium but in case of an accident you may end up paying $50,000 from your pocket.
3.Not having an umbrella policy
Umbrella insurance is a type of personal liability insurance that covers claims in excess of regular homeowners, auto, or watercraft policy coverage. You can get a million-dollar-plus policy for a reasonable premium.
For example, if you or your teen is involved in multiple car accidents where you are at fault. In this situation, if your total claims exceed the auto policy limit then the umbrella policy will cover additional claim amount (up to umbrella policy limit). Without an umbrella policy, you may end up paying a huge amount from your pocket.
Some frequently asked questions
Does my teenager need insurance to drive my car?
If your teenager has a license then your teen should be added to your car insurance.
How much does it cost to add a teenage driver to auto insurance?
Cost depends on multiple factors like age of your teen, driver history, state you live in etc. But as a thumb rule for one teen your insurance cost may go up by 100% or more.
Car insurance for 16 year old
Car insurance is always expensive for young drivers and it is highest for 16 year old drivers. 16 year olds have a car accident rate which is twice as high as 17 or 18 year old drivers. You can use tips mentioned in this article to save on car insurance for 16 year olds.
Insurance for 17 year old driver
Car insurance is always expensive for young drivers and it is highest for teen drivers. You can use tips mentioned in this article to save on car insurance for 16 year olds.
Best way to save on insurance is by comparing with 20 or more insurance carriers. Since you may not have time or energy to compare with multiple carriers you should hire an independent insurance agent who can shop for you.
Try https://coverclan.com/ and start saving today. They will shop with up to 50 insurance carriers and save time and money for you.