Premiums for auto insurance covering teens can vary dramatically. Some explanations of the costs and tips to consider are included below.
Lack of driving experience is considered by insurance company to pose a high risk. To compensate for this risk, higher premiums are charged for teens than adults. There are some things you can do to help reduce the premiums for your teen driver.
Safe driving without any speeding tickets, traffic violations or accidents helps to reduce the premiums over time. Stressing the importance of safe driving to your teen is critical.
Insurance with a high deductible results in lower premiums. This is also an option for saving in auto insurance. The higher the deductible is, the lower the premium. It is important to note, however, that you are responsible for the deductible amount should an accident occur.
Purchasing a well-built vehicle with extra safety features should result in a lower premium. Avoiding sports cars or car models that fall into the “higher risk” rating class should also keep your premiums lower. The car model rating class is an important item to check.
Graduated licensing laws place restrictions on new drivers based on the license issued. This is now in effect in most states in the US and in some provinces in Canada. The guiding principle is to reduce risk of new drivers by limiting what their license allows them to do. The restrictions vary by state.
In some states, the restriction may be a letter after the class designation to indicate a new driver. Some of the restrictions may include nighttime driving restrictions, vehicle occupant restrictions and zero alcohol tolerance restrictions. In some cases, new drivers may be required to take additional tests after a period of time to be removed from the new driver status.
If you are still wondering where you can get the less expensive insurance for your teen – try a standalone policy. A standalone policy means that your teen is not added as an additional driver on your insurance, but rather carries their own insurance. Purchasing a standalone policy from an agency that specializes in teen insurance can provide additional savings.
Agencies that specialize in teen insurance reduce their risk by adding requirements to the coverage. Some of the requirements may include attending driving classes, no nighttime driving or other restrictions. This allows these agencies to keep the premiums lower for teens.
Insurance companies are hesitant to provide lower rates for teens based on the statistics. A 16 year old driver is 10 times more likely to get into an accident than an adult between the ages of 30 and 59.
Teaching responsible driving to your teenager is the best approach to keep insurance premiums low for your teen. Requiring them to pay a portion of the insurance premiums as well as earning your trust for use of the car are ways to teach responsibility and accountability.
Now that you teenager has passed their driving test and you have some tips to reduce the insurance cost, why not let them start exploring their new freedom?