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Note: This post was submitted to Student Caffé by Katie Tu. We would like to thank her for her submission and credit her as the author of this blog post.
Many teenagers look forward to learning to drive and having their own car. As great as it is for them to have freedom, it’s very important that they also have the right coverage and insurance for themselves and their vehicle.
According to the CDC, young people aged 15–19 represented only 6.5% of the population but accounted for an estimated $13.6 billion of the total costs of motor vehicle injuries in 2016. Compared to other age groups, teen drivers cost insurance companies the most money, so their insurance rates are typically higher as a result. There are many factors that determine the rate of an individual policy, but the average cost of insuring a 16-year-old driver is $438 per month. Obviously, that’s a significant amount of money to pay for a single driver, but there are ways that parents and teens can save:
- Take driving courses. Taking a defensive driving course or participating in a Graduated Driver License Program (many states require teens to get a learner’s permit, then a provisional license—with restrictions on night driving or the number of passengers permitted in the car—and then will grant a full license) will help ensure that a teen is a safer driver. Driving schools are designed to teach novice drivers the ways of the road and how to effectively navigate hazardous conditions. These are fundamental skills that ensure a driver is acting safely and isn’t participating in behaviors that could harm themselves or others on the road. Teens who enroll and complete driving programs can save up to 10% on their insurance policies.
- Drive a safe car. Typically the rate of an insurance policy is based around the type of vehicle you drive. Larger vehicles provide the greatest protection, and smaller vehicles have the largest disadvantage in the event of an accident. Overall, if a teenage driver is in a safer car, rather than a flashy sports car, they’re more likely to survive a crash (which means less for an insurance company to pay out). So, safer cars equal lower policy rates.
- Get safety features. Any features that can be added to a vehicle for added safety and accident prevention can help lower a policy rate—not to mention provide peace of mind to parents of teens. Some common safety features include rearview cameras, blind spot detection, anti-theft protection, and automatic emergency braking. The 2018 Chevrolet Malibu actually includes a “Teen Driver” system, which encourages occupants to buckle up, sets off alerts if the driver is speeding, and creates a report card based on how often other safety features were activated while driving.
- Earn good grades. The most common discount provided to teen drivers is a good student car insurance discount. Depending on the insurance company, discounts may be provided if the teen being insured has a 3.0 GPA (B average) or higher, and discounts may be up to 25%. Some companies require submitting a report card regularly to ensure that the student continues to keep up their grades. Don’t qualify for a good student discount right now? Don’t fret. If the student increases their GPA in the future, you can submit an updated report card and ask for the discount at a later time.
- Bundle with a parent’s policy. Instead of purchasing an individual policy for a teen, parents should consider adding the teen to their own policy, as it’s typically cheaper. You could save even more by bundling car insurance with home, renter’s, or life insurance! Bundling generally provides big discounts from a provider, so check to see what options there are and how much can be saved.
- Compare quotes. Probably the most important tip: Shop around and compare quotes. Not all insurance companies or policies are created the same, so it’s important to work with different agencies to build comparable quotes and them choose from among them. Consider liability, comprehensive, and collision coverage, as well as the deductible, to ensure that you’re getting the best rate for the coverage you need. Keep in mind that some states have a minimum amount of coverage required of all drivers.
Aside from these six tips, don’t be afraid to ask your insurance company if there are other ways to help you save on your teenager’s policy. For both parents and teenagers, it’s important to realize that driving is a privilege and to practice safe driving. Be sure to avoid distractions, wear your seatbelt at all times, and follow traffic and road rules. The longer you prove to be a knowledgeable and safe driver, the lower your rate will be in the future.
