When your teen finishes the driver training programme and gets behind the wheel of your car, your insurance rates could go up by as much as 96%. Yikes! Why?
Joe Annotti, a representative for the Property Casualty Insurers Association of America, says this about teen drivers: "The first month is fine, but then they think they know everything about driving and safety, and pretty soon they're going 60 mph down a back street to get to school."
Car accidents kill more teens and young adults under the age of 25 than any other cause. Teens and young adults under the age of 25 are three times more likely to die in a car accident.
So it makes sense that when you add your teen driver to your insurance policy, your rates go up by 50% to 200%. Auto insurance companies just don't want to take on that risk without your money.
Before your teen driver gets behind the wheel, there are a few things you might want to think about that might make your rates go up less.
Find out how your insurance company pairs drivers with cars. This is different from one insurance company to the next, and it can make a big difference in the price of your premium. You might want to think about getting your teen a cheaper car, like an old beater that sits in the driveway most of the time. Sometimes this is cheaper than paying double or triple the amount for insurance on a luxury or new car that your teen will drive. Or, if your family has both a new and an older car, see if your auto insurance company will let you put the teen driver in the older car. This will lower your costs. If not, you might want to look for a different insurance company.
- An honest
A student may not drive better than a C student in most cases, but many insurance companies give discounts of 10 to 25 percent to teens who keep a B average or higher. Why? These kids are seen as bigger risks for the future. Joe Annotti said, "They want the A student as a customer in the long run." People think that "better" students are "more responsible."
- Don't tell your insurance company about the small bumps. If you do tell them, your insurance will definitely go up. Most likely, it will be cheaper for you to pay for the small repairs yourself or maybe have your teen pay. Ouch!
- If you raise your deductible, your premium should go down by about 35%. When his daughters learned to drive, Ron Lovatt of the Automobile Club of Southern California raised his deductibles from $500 to $2,000. It makes good financial sense to raise the deductible to lower the ongoing premiums. No matter how old the driver is, it might be a good idea.
- Don't send your teen to a short-term driver's ed course. Studies published in the American Journal of Preventive Medicine show that short-term courses don't help prevent future accidents. However, your auto insurance costs will go down by 5–15 percent. Go figure.
- Remove your teen from your policy if they are going to college and won't have a car. But know that your teen will never drive during this time, no matter whose car it is. You can sue them if they drive without insurance and cause an accident.
It shouldn't be a surprise that the best way to find low rates and good auto insurance coverage is to know what the other companies offer and how much they charge. Smart shoppers will find the best deals for their needs.
