Auto Insurance Basics For Teen Drivers

Getting car insurance for a young driver can be expensive due to their lack of driving experience. There are two ways to insure a teen driver: adding them to an existing policy or having them purchase their own standalone policy. In most cases, it is more affordable to add a teen driver to an existing policy, as they can benefit from the savings and rate of a longtime driver. However, it is important to note that insurance companies may differ in how they price policies for young drivers, so it is essential to do research to find the best option.

Adding a teen driver to an existing policy

As a parent, you will likely be faced with the task of adding your teenager to your car insurance policy. This can be a daunting task, as it typically leads to higher insurance premiums. However, there are several things you can do to ensure your teen is properly insured while keeping costs as low as possible.

First, it is important to understand that there is no standard rule on when to add your teenager to your policy. This depends on various factors, including state laws and insurer-specific guidelines. Some insurance companies require you to add your teen as soon as they get their learner's permit, while others will have you wait until they obtain their full license. It is always a good idea to contact your insurance company or a licensed insurance specialist to determine the best course of action for your specific situation.

Once you have determined the appropriate time to add your teen to your policy, you can start shopping around for the best rates. It is generally cheaper to add a teenager to their parent's policy than for them to purchase their own. By insuring your teen's car with your insurer, you may also qualify for a multi-vehicle discount. However, insurance companies differ in how they price policies for young drivers, so be sure to do your research to find the best fit.

When adding a teen driver to your policy, you will also want to consider increasing your liability insurance coverage. State minimums for liability insurance may not be sufficient if your teen is involved in an accident. By purchasing higher amounts of liability coverage, you can protect yourself from financial liability in the event your teen is found negligent in an accident. Additionally, consider raising your deductible to save on your premium. The higher the deductible, the lower your insurance premium will be.

There are also several discounts that can help offset the cost of adding a teen driver to your policy. Many insurance companies offer good student discounts for students who maintain a B average or higher. Your teen may also be eligible for a discount if they take a driver's education course or go away to college without taking a car. By combining these cost-saving strategies, you can ensure your teen driver is properly insured while keeping your insurance premiums as low as possible.

Discounts for good grades

Teen drivers are considered high-risk, so auto insurance for them is expensive. However, insurance companies often offer discounts for good grades, which can help lower the cost. Here are some tips for getting discounts for good grades:

Maintain Good Grades

To qualify for a good student discount, your teen driver will need to earn good grades in school, typically a B average or a 3.0 GPA or above. Some companies may require a higher GPA, so be sure to check with your insurance provider.

Submit Proof of Grades

Once your teen has achieved good grades, you'll need to provide proof to the insurance company. This usually involves sending a copy of their report card or transcript. Be sure to ask your insurer about their specific requirements.

Shop Around for Quotes

It's a good idea to get quotes from multiple insurance companies to find the best rates and discounts. Spending some time researching and comparing different insurers can help you find the most affordable coverage for your teen driver.

Homeschooling and Good Student Discounts

If your teen is homeschooled, they may still be eligible for good student discounts. Some insurance companies, like State Farm, accept homeschooled students who have taken certain national standardized tests within the past 12 months and ranked in the top 20%.

Combine with Other Discounts

You can combine good student discounts with other discounts to maximize your savings. For example, if your teen driver is away at college without a car, you may be eligible for a distant student discount or an "away-at-school" status, which can further reduce your premium.

Examples of Good Student Discounts

• State Farm: Up to 25% savings for students with good grades up to age 25.
• Allstate: Good student discount for unmarried drivers under 25 with at least a B- average.
• Geico: Up to 15% off for full-time high school or college students with a B average or higher.
• USAA: Good student discount for full-time students aged 16-25 with a B average or higher (not available in Hawaii or North Carolina).

By taking advantage of good student discounts and combining them with other savings opportunities, you can help offset the high cost of auto insurance for teen drivers.

Discounts for safety courses

Defensive driving courses are a great way to improve your driving skills and can also help you save on your auto insurance. These courses typically cover driving and road safety statistics, accident avoidance techniques, and local driving laws. They can be taken online or in person and usually last between four to eight hours.

Many insurance companies offer discounts to drivers who take defensive driving classes, with savings typically ranging from 5% to 20% off your car insurance premium. Eligibility varies by state and insurance company, but they are most commonly offered to teenagers and drivers over 60.

For example, in Texas, auto insurance providers that offer a defensive driving discount will reduce your rate anywhere from 2% to 10% if you complete the course and meet all eligibility requirements. Similarly, in Illinois, drivers who complete an approved defensive driving course can save up to 5% on their auto insurance.

Some insurance companies, like GEICO, offer discounts to policyholders who complete an approved defensive driving course. GEICO policyholders can take advantage of discounted prices for online defensive driving courses offered by Defensive Driving by IMPROV, the National Safety Council, or the American Safety Council. After successful completion, GEICO will be automatically notified, and your policy will be updated to reflect the discount.

It's important to note that eligibility criteria may vary. For instance, some companies require that you complete the course voluntarily, not as a result of a court order. Additionally, certain companies may have age requirements, with discounts offered only to drivers above a certain age, such as 50 or 55.

Other Discounts for Teen Drivers

In addition to safety course discounts, teen drivers may be eligible for other discounts. For example, Safeco offers four types of discounts for teen drivers, including a 24-month good student discount for those who can provide certification of academic achievements and a distant student discount for resident students studying over 100 miles away from home without a car.

Furthermore, some companies provide discounts for teen drivers who complete driver education courses. For instance, Allstate offers insurance discounts to teen drivers who complete an approved defensive driving program, and Safeco offers a driver training discount to customers under 21 who complete a driver education course.

How to Find Out If You Qualify for a Discount

Before signing up for a defensive driving course, it's essential to check with your insurance provider to see if they offer discounts and what their specific eligibility requirements are. You can also inquire about other available discounts that you may qualify for. Additionally, ensure that you select a course approved by your state and insurer to maximize your chances of receiving a discount.

Discounts for students away from home

Car insurance for young drivers can be expensive, but there are ways to save money on auto insurance for students who are away from home. Many insurance companies offer discounts for students who are attending school far from home, typically more than 100 miles away. This is known as a 'Student Away at School Discount' or a 'Distant Student Discount'. To qualify, the student must be listed on the policyholder's auto policy, be under a certain age (usually 22 or 25), and not have a car at school. The student can still occasionally drive the insured car during school breaks and holidays.

Some insurance companies, such as Progressive, also offer a discount for students who are under 18 and still in their teenage years. This is in addition to their Distant Student Discount, which applies to students up to 22 years old.

If a student is leaving their car at home while they attend school, this can also help lower the cost of insurance. This is because the car is less likely to be damaged or stolen if it is kept in a garage or storage area. In this case, the student can be changed from a primary driver to an occasional driver on the policy, which can lower the premiums. However, it is important to keep the student on the policy, as removing them entirely could result in a loss of coverage if they need to drive during breaks.

Another way to save on car insurance for students away from home is to take advantage of good student discounts. Many insurance companies, including Progressive, Geico, and Travelers, offer discounts for full-time students who maintain good grades, usually a B average or better. These discounts can range from 10% to 15% off the policy premium.

Finally, for college students living off-campus, bundling renters and car insurance policies can also lead to savings. By purchasing both policies from the same company, students can often receive a discount on their car insurance.

Assigning a teen to the right car

When it comes to assigning a teen to the right car, there are several factors to consider. Firstly, it is important to understand the financial implications of adding a teen driver to your insurance policy. Teen drivers are considered high-risk due to their inexperience, which results in higher insurance rates. It is generally more cost-effective to add a teen to an existing policy rather than purchasing a separate policy for them.

To minimize costs, it is recommended to assign your teen to the least valuable or cheapest car in the household. Some insurance companies will automatically assign the most expensive-to-insure driver, typically the teenager, to the most expensive car on the policy. By assigning your teen to the cheapest car, you can save on insurance costs. However, it is crucial to ensure that your teen only drives the vehicle they are assigned to, even in emergencies, as penalties and premium increases may occur if they drive an unassigned car.

Another factor to consider is the safety of the vehicle. Look for cars with good safety ratings and safety features such as airbags, anti-theft systems, and anti-lock brake systems. These features not only protect your teen but can also help lower your insurance premium. Additionally, consider the age and value of the car. If the car is not worth much, you may want to skip comprehensive insurance, which covers theft and hail damage, and stick with collision insurance, which covers wrecks.

It is also important to involve your teen in the car insurance discussion. Educate them about the responsibilities associated with driving, including insurance costs and safety. Encourage positive behaviours by informing them about the consequences of driving infractions and accidents, including increased insurance rates.

Furthermore, take advantage of discounts offered by insurance companies. Many companies offer good student discounts for teens who maintain good grades or test scores. Additionally, teens who complete a driver's education course or recognized driver training programme may also be eligible for reduced premiums.

Frequently asked questions