Parents of teenage drivers will see an increase in premiums that can
range from 50% to 200%, but there are some simple things that smart
parents can do to prevent their teenage driver from breaking the
Shopping around is important, both when choosing an insurer and when
choosing a vehicle for your teen. New cars are expensive to insure, so
consider buying a late model used car that qualifies for lower rates.
If there absolutely must be a new car in the family, purchase it for
yourself and give your teen the keys to your old car. Many insurance
companies automatically assign the most expensive driver, in most
cases, your teenager, to the car that is most expensive to insure. By
assigning your teen driver to a car with cheaper premiums, you can end
up reducing the amount your premium increase by up to one third. Not
all insurers allow policy holders to make their own driver assignments,
so if your insurer doesn't, be sure that the rates are low enough to
compensate for what you would otherwise be saving.
Education is important, and many insurance companies recognize this by
offering student related discounts. A teen that maintains a B average
or above can qualify you for premium reductions of 10% to 25%, and
enrolling your teen in Driver's Ed. can add additional discounts from
5% to 15%. Education in the form of supervised driving is also
important for your teen. States that have adopted "graduated license
requirements have seen significant decreases in the number of
automobile accidents and fatalities. Fewer accidents mean lower
premiums, so be sure and give your teen plenty of supervised practice
before allowing them to drive solo.
Pay for any minor fender-benders out of pocket, since even the most
minor of accidents can cause a dramatic premium increase. Once you are
sure that your teen has enough training an experience to maneuver
safely in traffic, consider increasing your deductible, which can
reduce your premium by up to 35%. Save your insurance for big
accidents; the money you've saved will cover the small ones.