Finding Affordable Auto Insurance For Your Teen Driver

Teen drivers are considered high-risk by insurance companies due to their lack of experience and higher likelihood of accidents. This results in higher insurance premiums for teens compared to older, more seasoned drivers. However, there are ways to find cheap auto insurance for teens. Here are some tips to help you get started:

- Shop around for insurance providers: Compare quotes from multiple insurance companies to find the most affordable option for your teen. Getting quotes from at least three different insurers is generally recommended.

- Add your teen to your existing policy: Adding a teen to a family policy is typically much cheaper than getting them an individual policy. This can result in significant savings, even for older teens attending college.

- Look for discounts: Many insurance companies offer discounts specifically for teen drivers. These include good student discounts, defensive driving course discounts, and telematics-based discounts for safe driving habits.

- Choose the right car: Opt for a safe, reliable, and inexpensive car for your teen. High-end or high-speed vehicles often come with higher insurance rates.

- Limit their driving distances: Some insurance companies offer discounts for low mileage, typically below 7,500 miles per year.

- Keep the car title in your name: Putting the car title in your teen's name may require them to get their own insurance policy, which tends to be more expensive.

- Encourage safe driving: Accidents can increase insurance costs. Educate your teen about safe driving practices and consider enrolling them in a certified driving course, which may also unlock discounts.

Shop around for a policy

Shopping around for a policy is one of the most effective ways to find cheap auto insurance for teens. Comparing quotes from different insurance companies helps you identify the lowest rates and the best deals. It is recommended to get quotes from at least three insurance providers before purchasing a policy. Even after securing coverage, it is advisable to compare rates from other insurers every 6-12 months to ensure you are still getting the best deal.

When shopping around, consider the following:

• How much it will cost: Compare the difference in rates between adding a teen to your existing family policy and buying them their own policy. Adding a teen to your family policy is usually more cost-effective and can result in savings of up to 60%.
• Student discounts: Look for insurance companies that offer discounts for good grades, safe driving, or completing driver's education courses. These discounts can help lower insurance premiums significantly.
• Accident forgiveness: Teens are more likely to get into accidents than other age groups. Consider insurers that offer accident forgiveness as an add-on or after a certain period of safe driving.
• Coverage options: Balance cost and caution when choosing coverage. While a liability-only policy may seem tempting to save on premiums, remember that teens have a higher risk of accidents. Consider comprehensive and collision coverage for added protection.
• Online quotes and management: Some insurance companies, like Auto-Owners Insurance, do not offer online quotes or the ability to manage policies online. If this is important to you, look for insurers that provide these digital services.

Add your teen to an existing policy

Adding a teen driver to an existing policy is generally more affordable than getting them a separate policy. However, it's important to note that doing so will still lead to a significant increase in insurance rates, ranging from 70% to 150% according to Insure.com. This increase is due to insurance companies viewing inexperienced drivers as a high risk.

• Contact your current insurance provider: Get in touch with your insurance company to understand their specific guidelines and requirements for adding a teen driver. Some companies may allow you to list a teen with a learner's permit on the policy at no charge until they become a fully licensed driver. Others may require you to add the teen and start paying premiums once they receive their permit. Understanding these details will help you make an informed decision.
• Get a quote for adding your teen: When you're ready to add your teen to the policy, get a quote from your current insurance company. It is recommended to increase your liabilities to 100/300/100 to ensure adequate coverage.
• Shop around for better rates: Don't settle for the first quote you receive. Contact other insurance companies and compare their rates and offerings. This will help you find the best deal and ensure you're getting the coverage you need.
• Ask about discounts: Many insurance companies offer discounts for teen drivers, such as good student discounts and defensive driving course discounts. Inquire about these discounts and take advantage of the ones your teen qualifies for.
• Monitor your teen's driving: Encourage safe driving habits and consider enrolling in a telematics program, which can provide accountability for your teen and potentially lower your insurance rates.
• Choose the right car: Opt for a vehicle with high safety ratings and avoid high-end or sports cars, as these can significantly increase insurance rates. Consider buying a used vehicle in good condition or choosing a family sedan, minivan, or small SUV, which typically have better rates for teens.

Remember, while adding your teen to an existing policy can save you money, it's still a costly endeavour. Be prepared for higher insurance rates and consider the various strategies mentioned above to mitigate the financial impact as much as possible.

Look for discounts

There are several discounts that can help lower the cost of car insurance for teens. Here are some of the most common ones:

• Good student discount: Many insurance companies offer discounts for students with good grades, usually a "B" average (3.0 GPA) or higher. This tells insurance companies that your teen is responsible. This discount can save you up to 16% on your premium.
• Defensive driving/safe driving discount: Taking a defensive driving or driver education course can help lower insurance rates. These courses teach techniques for handling emergencies, dealing with stressful driving situations, and anticipating potential hazards. Online classes are often a convenient option, but be sure to check with your insurance carrier first to ensure the course will lead to a discount. This discount can save you around 5% on your premium.
• Student away from home discount: If your teen is away at college and not driving a vehicle, many insurance companies will offer a discount, which can average around 18%.
• Good driver discount: Maintaining a clean driving record can help lower insurance rates. This discount may not be available to newly licensed teens.
• Low-mileage discounts: Pay-as-you-drive or pay-per-mile insurance programs can reduce rates for teens who don't drive often. Insurance companies may offer discounts if you allow a telematics device to be placed in your vehicle to monitor driving habits. This type of discount can provide a savings of around 6%.
• Multiple vehicle discount: If you have more than one vehicle insured with the same company, you may be eligible for a discount.
• Home and auto bundle discount: Combining your home and auto insurance policies with the same company can often result in significant savings.
• Military discount: If your teen is a member of the military, you may qualify for a military discount with many insurance companies. USAA, for example, offers affordable insurance rates for military members and their families.
• Safe driver monitoring program: Some insurance companies offer programs that track your teen's driving habits through a smartphone app or a device installed in the vehicle. Participating in these programs may qualify you for a discount, but there is a risk of rates increasing if the data shows risky driving behaviour.

Choose a safe and moderately priced car

When it comes to finding cheap auto insurance for teens, one of the most important factors to consider is the car they will be driving. Choosing a safe and moderately priced car can help keep insurance costs down. Here are some tips to help you make the right choice:

• Opt for a used car: Used cars are generally cheaper to insure than brand-new models. Look for a well-maintained, used vehicle in good condition that doesn't require comprehensive coverage.
• Consider the safety features: Look for a car with safety features such as anti-lock brakes, airbags, and anti-theft devices. These features can help reduce insurance premiums. Check with your insurance provider to see which safety features qualify for discounts.
• Choose a car with a high safety rating: The Insurance Institute for Highway Safety has identified the Ford C-Max Hybrid and the Mazda 3 as two of the safest moderately-priced cars for teens. These vehicles offer excellent safety features and crash protection, which can help lower insurance rates.
• Compare insurance rates for different car models: Before making a purchase, compare insurance rates for different car makes and models. You can use online tools or speak with an insurance agent to find out which models are the most cost-effective to insure.
• Discuss vehicular responsibilities with your teen: Involve your teen in the process and discuss the importance of safe driving. Emphasize the impact of their driving record on insurance rates and the financial implications of any accidents or violations.
• Consider the repair costs and age of the vehicle: Insurers also consider repair costs and the age of the vehicle when setting insurance rates. Opting for a newer model with lower repair costs can sometimes result in lower insurance premiums.

Remember, adding a teen driver to your insurance policy will likely result in higher rates. However, by choosing a safe and moderately priced car, you can help mitigate the increase and find a more affordable option for your family.

Raise your deductible

Raising your deductible is a simple way to lower your car insurance premiums. However, it is important to weigh this option against the fact that young drivers are more likely to get into accidents. You will have to pay the deductible amount when you get into an at-fault accident. Increasing your deductible from $500 to $1,000 will reduce your annual premium by approximately $400. This means that you will have to pay for repairs or other costs up to the deductible amount before your insurance coverage kicks in. For example, if you have a $1,000 deductible and your teen gets into a minor accident with repairs costing less than $1,000, they will be responsible for paying for those repairs out of pocket.

It is important to consider your teen's driving habits and accident risk when deciding whether to raise your deductible. If they are more likely to get into accidents, you may end up paying more in the long run with a higher deductible. Additionally, you can also drop comprehensive and collision coverage if the car isn't financed or worth much.

Before making a decision, be sure to use an auto insurance coverage calculator to figure out how much coverage you need and compare quotes from multiple insurance companies to find the best rates for your situation.

Frequently asked questions