Apr 25, 2024 | Updated: 11:35 AM EDT
Sep 02, 2019 09:05 AM EDT
When your teen is preparing to drive, it can come with a whole set of challenges for the entire family. It can be a stressful time and adding to the stress comes the difficulty of getting affordable insurance for a teen driver. Auto insurance can be extremely expensive for new drivers, and it can leave you with skyrocketing rates and an added expense you might not have been expecting.
On average, your insurance rate may increase as much as 130% after you add a teen to your policy. That amounts to an extra $2,000 each year.
The following are some considerations and tips to get car insurance for a teen driver at a reasonable rate-or at least one that's relatively reasonable.
When you're adding a teen to your insurance policy, it's best to start the process early on-ideally before your teen gets his or her learner's permit. It's almost always going to be cheaper, and sometimes significantly cheaper, to add a teen to your existing policy as opposed to getting them their own policy.
Usually a policy does cover ten drivers at no cost when they have their learner's permit, but ask your company about the specifics. When your teen then gets their license, let your insurance know you're ready to add them to your policy as a licensed driver.
If your teen is going to only be driving your car that's already insured, you may not need to add them to your policy because the policy may cover anyone in the family who's driving that vehicle. Before doing that, however, you should speak with the insurance company and potentially a lawyer as well.
If you're buying a car for your teen and their name is on the title, and they're the primary driver, they will need their own policy.
If you're sharing a car with your teen, then your insurance carrier may be able to list them as an occasional or secondary driver, which can be a great way to save money.
If your child is away at school, for college or otherwise, let the insurance company know. If they don't take a car, then you can usually save quite a bit on your premiums but still have coverage when your teen is home on school breaks and driving the vehicle.
One of the best discounts available for a teen driver is a good student discount. Insurance companies have done the math and figure good students are more likely to also be good drivers, or at least better drivers.
Many insurance companies offer good student discounts, and usually, to be eligible, they require your teen driver to have at least a B-average.
If at the time your teen doesn't have a B-average or a recent report card isn't available, you can contact your insurance company and add this discount later.
If you're going to buy your teen a car of their own, there are some things to keep in mind to keep your auto insurance low.
You should look for something that's going to be reliable for the next few years, but certainly not a new car. You don't want to get a loan on a teen's vehicle if at all possible.
If you don't have a loan on the car, then you can just go with personal liability and property damage insurance, which is the cheapest option.
You can't go with just this coverage if you have a loan on the car, however.
The concept of shopping around and regularly making sure you're getting the best deal isn't just smart when you're insuring a teen driver-it's a good idea for your own insurance policies as well.
You should frequently compare options from different companies, and if you're going to be making a change to your existing coverage, don't assume your current company is going to offer you the best deal.
With younger drivers, in particular, there can be a lot of variation in pricing between companies.
Finally, another good rule when it comes to saving on insurance, whether you have a new teen driver or not, is to use multipolicy discounts. When you bundle different policies with the same company, they will offer you a discount and sometimes it can be significant-anywhere from 5 to 15% on average. It's worth sticking with the same company for most consumers.
