Lowering the Cost of Your Teen's Car Insurance, Part 1

25 December 2018

Teen girl driving with father in passenger seat

There comes a time in every parent’s life when their children start to become adults. It starts with puberty and growth spurts but soon enough, they’ll be wanting their own payment cards and somewhere around 16, they’ll expect to start driving. Most parents have no problem teaching their teens the basics of driving including basic car operation, stop signs, traffic lights, and how to merge on and off the freeway.

If your teen is at all capable and calm about driving, then this is an only slightly nerve-wracking experience. The truly difficult part comes when it’s time to get them insured and you realize just how much this is going to cost. Even the least expensive teen policies are usually well over a thousand dollars a month unless you know how to work the system.

Insurance Companies Fear Teens

The most important thing to remember about ensuring your teen is that insurance companies are terrified of under-insured teen drivers. Experience is the one thing that keeps most people out of trouble in challenging situations like dealing with unexpected situations, unfamiliar intersections, and other aggressive drivers. Your instincts and years of driving will cause you to know when to slow down, speed up, change lanes, or hold position in response to upsetting or unusual road circumstances. Teens, on the other hand, are more likely to freak out on the road, make mistakes, misjudge the size of their car and hit something, or race when nobody’s looking.

When an insurance company asks for a ridiculously high monthly payment for your teen driver, this isn’t a personal judgment on you and (usually) isn’t an attempt to gouge families. They’re just looking at the statistics. Fortunately, you can use that same numbers-based judgment to make it clear that your child is in the ‘safe’ percentage of teen drivers who can be granted affordable insurance without putting the insurer at risk. All you have to do is follow these 10 tips and be on the lookout for other, more specialized, discount opportunities.

1) Start with Good Grades

Insurance companies have done the math and examined the results of millions of insured teen drivers. They know how often boys crash versus girls, the regions more likely to produce dangerous driving teens, and even year-by-year statistics on crashes by teen age groups. In all this research, what they have found is that teens who get good grades tend to be more responsible drivers as well as more likely to turn in their homework.

Almost every auto insurance provider in the country (and many around the world) offer a discount made specifically for teen and college-age drivers based on good grades. The best part about this discount is that it pairs perfectly with good parenting and can be used as a motivation. Simply make it clear to your teen that they aren’t allowed to drive or be on the insurance until they’re making B’s and above.

2) Enroll Them in a Driver's Education Course

Insurance companies have also found that there is a huge difference between teens who are taught casually by their parents or teach themselves to drive as opposed to teens that attend a driver’s education class. While some parents can be fantastic driving teachers, statistically teens that take driver’s ed are more likely to know the complete set of traffic laws and at least a few best practices for driving in a variety of conditions.

This means they are also less likely to get tickets, get into car crashes, or get sued by other drivers for damages, thus making them less expensive to insure. For parents with teens eager to drive, you can often send them to driver’s education and get a provisional license as early as 15, allowing your teen to start driving earlier as long as they follow the rules.

3) Add Them to the Family Insurance

Whether or not to add a teen to your family insurance or get them their own insurance has always been a large debate. In the vast majority of cases, it’s much more affordable to add them to the family plan. This way, their policy gets the benefit of your pre-existing multi-car, multi-policy discounts and possibly even a little benefit from parent’s good driving records. However, this is also not a universal rule.

Whether or not it’s better to add your teen to your policy or get a separate policy depends entirely on the insurer and how they handle adding new drivers. If, for instance, your insurer will automatically add the teen to every car in the household rather than just the one they will be driving, this can be more expensive than registering the teen separately with a single car. Look at policies carefully before deciding.

As you can see, we’re just getting started on the useful tips for keeping your teen’s insurance affordable. Join us next time for the second half of this two-part article where we’ll talk about car choice, safety tracking, college, and much more!