Insuring a Teen Driver 101
Teen drivers and their parents are often shocked by the incredibly high rates they are quoted when they go shopping for insurance. Unfortunately for teens, your age and driving record are huge factors in your insurance rates. Luckily, there are things you can do to help keep insurance rates for teen drivers as low as possible.
How much does car insurance go up with a teenage driver?
There is no set percentage increase when you add a teenager to your insurance, but you are likely to see a significant jump in your premium costs when adding a minor driver to your policy. Insurance is so expensive for teens for several reasons, including:
- Lack of driving history: One of the biggest factors in determining your auto insurance rates is your driving history, but brand new drivers don’t have a driving history. This means they are rated as though they are very likely to end up filing a claim.
- Statistics: Insurance companies often use statistics to determine how much to charge people for insurance. This is why some groups of people (women, married people, etc.) are given better rates than other groups — the statistics indicate that they are less likely to file a claim. Teen drivers statistically have a higher rate of accidents, including fatal crashes, which drives up the cost of their insurance.
- Fewer discounts: Many insurance companies offer a variety of discounts that simply don’t apply to teen drivers. Discounts for married people, homeowners, members of the military, and senior citizens are just a few of the discounts teens aren’t able to take advantage of when signing up for an insurance policy.
The cheapest, easiest way to get insurance for a teen driver is to add them to their parent’s insurance policy. This allows teens to take advantage of all of the benefits their parents are already receiving, such as bundling discounts and reduced rates for being a long-time customer of the insurance company.
It is possible to get a separate insurance plan for a teen driver, and it might even be the right choice in some circumstances, like if your teen’s driving record is less than stellar and you are afraid your insurance company will drop you from their coverage altogether. However, most of the time the most affordable option is to keep your teen on your family insurance policy.
How to insure college students
Insurance for college students can be tricky, especially if they are going away to live on campus. Fortunately, there are many ways to help reduce insurance costs for your college-bound teen.
- Good student discount: Any teen, whether they are in high school or college, can take advantage of good student discounts from their insurance company. Each insurance company has their own rules regarding good student discounts, but most insurance companies offer the discount to students with a B average or higher. You may want to talk to your insurance expert about this discount to make sure your teen meets your insurance company’s good student requirements.
- Away from home discount: Also called a distant college student discount, many insurance companies offer a discounted rate for students going to school 100 miles or more away from home.
- Alumni discount: Some insurance companies offer discounts to students and alumni from specific schools, so you may want to check with your insurance company to see if they offer a discount for your teen’s specific university.
The cheapest insurance for college students is almost always staying on their parent’s policy. That being said, it is possible to find affordable insurance for college students on their own policy as well. If you are shopping for an individual insurance policy our experts at Goosehead Insurance are available to help you find the best available coverage at the lowest possible rate.
Do I have to add my teenager to my car insurance?
The good news is that most insurance companies will cover your teen at no cost while they have their learners permit, typically for up to six months. The bad news is that almost every insurance company requires that a teenager with a driver’s license either be added to or excluded from your insurance policy.
If you have a teenager with a driver's license and do not add them to your insurance policy, you may be in a sticky situation if they ever use your vehicle. They would be driving without insurance, which is illegal in almost every state, and your insurance company would not be obligated to cover any damage they cause in an accident. Some insurance companies may cover the damage and allow you to backdate coverage to the date your teen received their license, but some companies won’t offer you that benefit.
You can choose to exclude them from your insurance, but doing so means you are promising your insurance company that your teen would not ever be allowed to drive your car, not even to move it out of the driveway. If they ever used your vehicle and got in an accident they would not be covered.
How to save on teenage car insurance
There are many ways to save money on insurance for teenage drivers, including:
- Safe drivers course: Some insurance companies offer discounts for drivers who take a safe driving course, teens included. They can also give teens more knowledge on the road and make them safer drivers, which is beneficial even if it doesn’t impact your rates.
- Good student discount: Keeping your grades up can earn you a discount on your car insurance.
- Choose the right car: Consider the insurance costs when choosing a car for your teen. An older vehicle might be cheaper to insure, and if it is completely paid for you might be able to carry liability only coverage to save even more money.
- Clean driving record: Teens and parents alike need to work to keep their driving record ticket and accident-free. Because insurance rates for teens and young adults slowly go down over time, teens need to keep their record clean to take advantage of the lowest possible rates.
- Work with an expert: Reach out to one of our experts at Goosehead Insurance to go over all of your options and help you keep your insurance costs low.
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