There’s no getting around the fact that you need auto insurance for teens. The key is to get cheap rates for the best quality coverage.
Insurers base rates on risk and, mile-for-mile, teens are the riskiest drivers on the road. The fatal crash rate per mile driven for U.S. 16- to 19-year-olds is nearly three times the rate for older drivers, according to the Insurance Institute for Highway Safety. The risk peaks for 16- and 17-year-olds, whose fatal crash rate is nearly twice that of 18- and 19-year-olds.
That said, there are things you can do to lower the prices for auto insurance for teens. Here’s a rundown to get cheap rates.
1. Add your teen to your auto insurance policy
Adding your teen to your policy will generally be cheaper than buying a separate policy. For one thing, your teen will benefit from factors that lower your rates, such as owning a home, being married, having established credit and having a safe driving record.
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In addition, you might get discounts for adding a driver to your policy and having multiple cars on your policy.
One exception might be if you have a vehicle that’s expensive to insure, such as a sports car or a luxury car, because you might have to insure your teen for access to all vehicles on your policy. If you opt not to include your teen driver on your policy, you may have to specifically exclude your him or her from the policy.
2. Auto insurance for teens — choose the right car
Buying a car with a better safety rating will not only protect your young driver, it could also save you money when shopping auto insurance for teens. Better safety ratings and records generally translate into fewer accidents and injuries, meaning fewer and lower payouts for insurers. Some companies even provide discounts for safety features.
Allstate, for instance, provides a discount of up to 30 percent for passive restraints like airbags and motorized seatbelts, and 10 percent for antilock brakes. Geico will discount rates up to 25 percent on injury coverage for driver-side airbags or 40 percent for full-frontal airbags, 5 percent on collision coverage for antilock brakes and 1 percent on some coverages for daytime running lights.
This is a good place to mention that the Insurance Institute for Highway Safety says teens are safest in larger, heavier cars that do not have high horsepower, are equipped with electronic stability control and earn high safety ratings. The IIHS maintains a list of recommended cars for teens. Picking on these cars should hep you get cheap rates when searching for auto insurance for teens.
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One caveat here is that the safest cars tend to be larger (as mentioned above) and newer, because they have the latest safety features. But bigger, newer cars also tend to cost more, and that can translate to higher insurance rates.
Insurers also consider other vehicle factors, such as the frequency of theft and engine size. An anti-theft system could save you 10 percent with Allstate and 25 percent on your comprehensive coverage with Geico.
3. Have your teen take a driver training course
Signing your teen up for a driving course is a smart safety move before shopping for auto insurance for teens, and your insurance company may also reward you with lower rates. Contact your insurance company to find out how much of a discount you can get and which courses qualify. In addition, Liberty Mutual provides a discount for teens who sign a teen driving contract.
4. Good grades get cheap rates for auto insurance
Most insurers provide a discount for good students, generally defined as maintaining at least a “B” average, achieving an academic distinction, such as honor roll, or scoring in the top 20 percent on a standardized test. For instance, Geico says good students between ages 16 and 24 can get 15 percent off of certain coverages. Allstate says it’s good student discount is up to 20 percent. This can definitely help you get cheap rates when looking for auto insurance for teens.
5. Sign up for usage-based auto insurance
Usage-based insurance policies use devices installed in cars to monitor how much policyholders drive, and when and how they drive. They then provide discounts for driving less, not driving late at night and avoiding dangerous behaviors such as speeding, aggressive acceleration and hard braking.
State Farm’s Drive Safe and Save program, for instance, promises discounts of up to 50 percent. Allstate’s Drivewise program says drivers get 10 percent off for signing up and up to 20 percent back based on their driving.
A bonus feature is that you can use these programs’ apps to keep track of when and where your teens go, and how they are driving.
6. Shop around for auto insurance
Finally, it’s important to note that each insurance company prices driver factors differently, and no one company is the cheapest for all drivers in all places, especially when shopping for auto insurance for teens. In other words, you may be using the company that provides the best deal for you, but the addition of your teen could mean another company would give you lower rates. So shop around to get cheap rates for insurance.
Given that car insurance for teens is inevitably going to be a big expense, you’ll want to do everything you can to minimize the cost. These six steps will help you avoid paying even more than you have to.