Your teen is ready to get behind the wheel, but you may not be ready for the sticker shock of adding a young driver to your auto insurance policy. You may want a head start in your search for the cheapest car insurance for teens.
How much will young driver insurance cost? On average, insuring a teens sets parents back about $1,500 a year.
Fortunately, there are ways to get the cheapest auto insurance for teens. If you shop around for the best rates and look for teen driver discounts, you should be able to get your teen on the road without breaking the bank.
Teens drive up the cost of car insurance
It’s pricy to add your teen to your policy because drivers in that age group are risky to insure. In fact, teen drivers have three times as many accidents as drivers 20 and older, according to the Insurance Institute for Highway Safety.
Teen driver crashes are likely to involve one or more of these factors: driver error, speeding, teen passengers, alcohol use and nighttime driving, according to the IIHS.
Fortunately, many states require graduated driver licensing programs for teens, which can help reduce the risk of crashes. Teen driving safety increases when teens get driving permits at age 16 or older, receive 70 or more hours of supervised driving instruction, and gradually get more driving privileges as they gain experience on the road.
Find the cheapest car insurance for teens
- Shop around. When adding your teen to your policy, it’s smart to get quotes from multiple insurers even if you’ve been with the same company for years. One way to shop around is by getting online quotes for car insurance for teens. Or, an independent agent or broker can shop multiple insurers for you, says Keith Balsiger, president of Balsiger Insurance, an insurance agency with three locations in Nevada. Rates for teen drivers definitely vary by insurer, he says.
- Tie car privileges to good grades. Many insurers offer good student discounts, usually for kids who have a solid A or B average on their report card. If your child makes straight As, you’re in luck. If not, it might pay off to encourage your teen to study harder before you hand over the car keys. A good student discount could shave 25 percent off the base rate for young drivers, Balsiger says.
- Have your teen take a safe driving class. In addition to giving you a little more peace of mind, enrolling your child in a defensive driving class could lower your auto insurance costs. For example, Nationwide offers discounts for completion of defensive driver training. And Liberty Mutual offers discounts for parents of teens who complete online teen driving course called teenSMART, which cuts the risk of getting into a collision by 30 percent.
- Don’t let your kid drive the expensive car. One way to save money on insurance is to have your kid drive a safe, sensible used car rather than handing over the keys to your shiny luxury sedan. However, insurers don’t want to be told the kid is driving the beat-up Corolla wagon when he’s mostly behind the wheel of the new Mercedes convertible. So, some insurers blend the rate across all vehicles in the household, while others assign the youthful driver to the most expensive vehicle the family owns, Balsiger says. “What you want to do is find a carrier that rates the teen driver on the vehicle they actually drive the most,” he says.
- Consider a policy with accident forgiveness. It’s not uncommon for teens to have an accident, even if it’s just a run-in with the neighbor’s mailbox, while they’re getting comfortable behind the wheel. A collision can increase your rates by 30 percent, according to Nationwide. However, if you get a policy with accident forgiveness, the first accident will not hike your rates.
- Make your kid sign a contract. Making sure your teen drives safely is important both for your peace of mind as a parent and your insurance rates. If your policy doesn’t have accident forgiveness and your teen has an accident, your rates will rise. And a violation like speeding or a DUI also may cause your rates to spike. Teach your teen about safe driving practices like not giving rides to groups of friends and putting the phone away while driving. Consider getting a safe driving commitment from your kid in writing. Liberty Mutual offers a teen driving contract you can print out for your teen to sign.
Following these tips to get the cheapest car insurance for teens should help you teach your teen the rules of the road without having to pay a fortune in car insurance costs.