Parents of teenagers are often elated when their children get their driver’s licenses. This means no more schlepping around to sporting events, parties and late night movies.
Before don’t get too excited. Your newly licensed teenage driver comes with a new set of safety worries – and higher insurance costs. In fact, there’s no getting around it: you’ll pay much more to add your teenage driver to your family insurance policy than you would to add an experienced driver. Why? Because your teenager is a brand new driver and, with no driving history, insurance companies will consider them a high risk for accidents.
This should come as no surprise as automobile accidents are the leading cause of death for teens in the U.S. In fact, teenage drivers ages 16 to 19 are about three times more likely than drivers ages 20 and older to be in fatal car crashes, according to the Insurance Institute for Highway Safety and the Centers for Disease Control and Prevention.
With these statistics in mind, it’s important to make sure that you have more than adequate car insurance to cover your teenager in the event of an accident. You can still, however, do your homework to find the best policy at the lowest rate. For starters, adding your teenage driver and even another vehicle to your family policy will typically cost you less than purchasing a separate policy for your child. There are also plenty of other discounts available, according to Liberty Mutual Insurance. Here are our top four ways to save money when adding a teenager to your policy:
1. Hit the books
Sign your teenager up for a driver’s education course in your state. Upon completion of the course and providing your insurance company with a completion certificate, you’ll often see a 10 percent discount on your insurance. Some insurance companies, such as Liberty Mutual, even offer online driving courses that are proven to result in both safer driving and insurance discounts. In clinical trials, for example, teens who complete Liberty’s online teenSMART course have up to 30 percent fewer collisions one year afterwards than teens who didn’t take the training.
2. Make the grades
If you can show that your teen gets good grades in school, usually Bs or better, you can get a 10 to 25 percent good student discount on your insurance. The amount of the discount will depend on your insurer and the state you live in, so it’s definitely worth shopping around. State Farm, for example, offers up to a 25% good student discount, whereby Geico offers up to a 15 percent savings.
3) Leave the car at home
If your teen is headed off to college or already attending school at least 100 miles away from home, leaving his car at home can save you money on your insurance. Many insurance companies offer discounts to teens who only drive when they are home for school breaks or weekends.
4) Seal the deal
Some insurance companies offer additional discounts if teenagers sign safe driving contracts with their families. These contracts lay out driving rules and consequences for breaking those rules. Some typical agreements specify guidelines for driving at the speed limit, coming home by a certain hour at night, and limiting the number of passengers in the car. No texting or drinking while driving is a usual staple in these agreements. According to Liberty Mutual and SADD, open communication is "pivotal to inexperienced drivers understanding the rules of the road." A customizable agreement, like this one, can also help families handle tough discussions on how teenagers can be safer drivers.
Now that you know more about auto insurance discounts for teenagers, it’s time to do your research, find out what discounts are available in your state, and compare prices from different insurance companies. Keep in mind that auto insurance rates can vary markedly for the same coverage so it’s important to get quotes so that you can get the best deal and save money.