Insuring a teen driver can be extremely expensive, but there are ways to minimize the costs. Insurance companies will let you add a young driver to the parent's policy until the driver reach 25 years of age, provided the teen lives at home and is not an emancipated adult. Teens can also reduce the average cost of car insurance by driving an older car and keeping good grades in school.
Teen Insurance Costs
The cost of insuring a teen drive varies from one place to another as well among individual applicants. The fact is that insuring a teen could double the cost of an existing policy, or add up to more than a thousand dollars per year if the policy is purchased separately. Teens are high-risk drivers and should be covered with a sufficient amount of liability insurance to cover even a serious accident, because state required minimums are typically lower than the cost of liability injuries and damages in a major car wreck.
Avoid Buying Teen Insurance
The Insurance Information Institute advises parents to add teens to their own policy. Adding a teen to the parents' policy is much less expensive compared with purchasing an individual teen policy. Additionally, insurance is a legal contract and cannot be entered into by a minor, making it impossible for someone under 18 to buy his own insurance unless he is legally emancipated. Parents should have the teen drive the least-expensive car to insure, or to purchase an inexpensive car for the teen.
Why Teens Cost More
Teens are more expensive to insure because they have less experience behind the wheel. Because of the increased risk of accidents, insurance companies charge higher premiums to account for the costs. This high-risk assessment applies to all teens and young adults, up until age 25.
Cars That Save Money
The car a teen drives makes a difference in the average cost of auto insurance for teens. A car with four doors is less expensive than a two-door model. Older cars tend to be less expensive to insure. If you can pay in full for an older car, you can omit collision and comprehensive coverages, which reduces the cost of insurance dramatically. Consider raising the deductibles if you insist on purchasing collision coverage, because a higher deductible translates into lower premiums.
Make the Grades
Insurance companies offer insurance discounts to teens who maintain good grades. If your child maintains a B average or better, it demonstrates to the insurance company that the young driver displays a sense of responsibility. Driver safety courses also reduce the cost of insuring a teen driver if the certificate of completion is presented to the insurance agent.
- Credit Union National Association: Teen Drivers Increases Costs, Worries; Darla Dernovsek
- Insurance information Institute: Summertime and the Living's...Not So Easy For the Parents of Teen Drivers: More Accidents Take Place When Teens Are Out of School; July 2008
- Rocky Mountain Insurance Information Association: Saving Money on Teen Policies