Most teens cannot wait until they learn how to drive, get their license
and hit the open road. Unfortunately, finding auto insurance can prove
to be tricky. Having been in this position themselves, every driver can
understand the challenges of finding the right car insurance – but the
challenges can be compounded for young drivers. Since
teen drivers are three times more likely to have an auto accident, the rates – at least initially – can be very expensive. However,
there are ways to keep young driver insurance costs lower, such as
adding them to an existing policy, seeking out discounts they qualify
for and teaching them safe driving habits that will eventually lead to
Car insurance policies for young drivers
No matter what state you live in, having young driver insurance coverage
is a must. Teens need to realize that it’s a part of the responsibility
of owning or driving a vehicle;
it’s not an option to go without car insurance. Most
insurance companies have special auto insurance for young drivers. It’s
important to learn what the policies entail, including coverage limits.
Some parents add additional coverage when they seek car insurance for
teens as a precaution.
When should I consider purchasing auto insurance for my teen?
Purchasing auto insurance for teens typically occurs after they pass a
driving test and get their licenses. Before obtaining a driver’s
license, young drivers with a learner’s permit should also be covered
under an auto policy. Most auto policies will cover teens with a
learner’s permit that are driving the car of an adult in the same
household, but it’s never a bad idea to confirm coverage with your car
Most insurance agencies will require licensed drivers -- even teens --
living in the same household to be covered. Younger drivers are
typically added to their parent’s policy as it’s usually more
insurance laws do vary from state to state, so it’s
always a good idea to speak to your agent about young driver insurance
as your child approaches driving age.
Teen driver insurance providers
Almost all insurance companies can underwrite a car insurance policy for
teens even though many new drivers end up on their parent’s policy as
soon as they get their driver’s license.
However, for young drivers who are shopping for their own car insurance,
it’s a good idea to research the companies that are within your coverage
Once you’ve narrowed down your selections, it’s time to consider the
factors that go into making a final decision on what constitutes the
best young driver insurance for you.
Factors to consider when choosing an insurance provider
Price - this is probably the single most important
factor that teen drivers or their parents consider, and for good
reason. As younger drivers are generally inexperienced, auto insurance
rates for teens are often higher than those of an established driver.
For this reason, it’s advisable to shop around for the best price, but
don’t rely on this factor alone.
Coverage – another important factor when considering
a young driver insurance policy is the amount of coverage provided.
There is no one-size-fits-all policy; the factors that
influence the decision of how much coverage should be purchased differ
from person to person. Some drivers only need collision coverage while
others will need a comprehensive policy. However, for younger drivers,
it is advisable to have a higher level of coverage, even if they drive
a car that has already been paid for in full.
Look for higher deductibles on car insurance for
teens as that often lowers the monthly rate.
Customer service – not all auto insurance companies
are created equal. Some are well touted for their attention to detail
and excellent customer service skills, especially when handling car
insurance for young drivers. It’s important to research companies and
individual agents, to see what others have experienced when dealing
with a claim or policy change request.
Discount programs – everyone loves to save money, and
teens and their parents are no exception. When shopping for young
driver insurance, ask your agent about any qualifying discounts that
may be available. These can help drop the rates, in some cases
The cost of insuring young drivers
There are several considerations that go into the cost of insuring young
drivers. The amount of driving experience, the type of license they
have, and the make and model of their vehicle are three things at which
insurance companies look. Typically, a longer driving history and clean
record will lower rates. Most young drivers operate with a license to
drive personal vehicles, but drivers with a license to operate larger
vehicles such as busses and trucks with heavy towing capabilities may
pay higher premiums for insurance as their vehicles and towed items may
cost more to cover. Newer cars can also increase the cost of insurance
because of the greater value of the vehicle compared to older models.
Adding to an existing policy - Parents who opt to
add their young drivers onto their existing policy will see an
increase in their overall insurance premium. However, it’s easier
for new, inexperienced drivers to become insured this way. The young
driver insurance policy cost won’t increase as much if the child is
driving mom or dad’s car. If they are driving their own vehicle, the
existing rate could increase by a few hundred dollars a month.
Opening a new policy – Opening a new car insurance
policy for teens isn’t often recommended because of the high cost.
Insurance companies consider these young drivers a higher risk and
as such, it’s not uncommon for an auto insurance policy for teens to
cost upwards of a thousand dollars per year. Many teens can’t afford
these rates, even if they are working full time. It’s not impossible
to find affordable car insurance for teens, especially if the
vehicle being driven is older and doesn’t require comprehensive
Saving on teen auto insurance
As with any young driver insurance policy,
there are ways for teens to reduce their rates. Let’s
look at a few different ways to lower that bill.
Student discounts for good grades – insurance
companies like to reward teens who show responsibility and keep up
their grades. These discounts are typically offered to young drivers
between the ages of 16 and 24, though some insurance agencies may have
other ranges. While the grade requirement may vary between providers,
a common qualification for a good student discount is to maintain a B
average in high school or college, with proof of grades. The amount or
percentage discounted on car insurance for young drivers varies per
agency, but it’s worth making an inquiry.
Loyalty discounts - loyalty discounts come as teens
and young drivers maintain their policies with a specific agency or
agent. The longer they keep a policy with the company and keep their
account in good standing, typically the better the discount.
Safe driver discounts - driving safely is a must and
insurance companies measure this by looking at the number of traffic
violation tickets and accidents a driver has. Even
teens can qualify for safe driver discounts on their
insurance policy if they maintain an impeccable record. Some agencies
even offer a tracker to reduce rates. You simply install it in the car
and the tracker monitors the driver’s habits. Discounts can be offered
to those who follow the speed limits and traffic laws.
Winter is coming and in many parts of the country, winter weather can be unpredictable. Suddenly every day tasks like driving become more difficult due to snow, ice, or freezing rain. According to the NHTSA, 17% of all vehicle crashes occur during winter conditions. It is important to take extra precautions when it comes to driving in these circumstances.
While gap insurance isn’t required to be a part of your insurance policy, this type of add-on coverage can financially protect you from a total loss. If you owe more on your loan than your car’s current market value, you are considered “underwater” or “upside-down” on your loan. In order to avoid making payments on damages that exceed the value of your car, it may be worth it to consider adding gap insurance to your policy.
Almost every state requires all drivers to have car insurance. Without it, you’re prone to significantly higher financial loss whether you’re involved in an accident or your car gets stolen. Insurance protects you, your passengers, and your car in the case of an emergency. If you’re new to shopping for car insurance, it’s important to shop around for the best rate and terms possible. Here’s a comprehensive guide on everything you need to know to buy car insurance.
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