If you have a new teen driver in the household, he or she may be shopping for cars soon, or be driving one of yours. Auto insurance for young drivers is expensive but there are ways you can save money and make the process of getting insurance easier for you and your teen driver. Here are 6 tips that can help you cut costs and get the best coverage for your money when insuring teen drivers.
1. Check Out Insurance Rates Before Car Shopping
Too often, people make the mistake of buying a car and then checking out the insurance. This can be a big mistake because not all vehicles have the same insurance rates, and if you choose a sports car with a lot of power, your car insurance premiums could be through the roof. In fact, some companies refuse to cover young drivers on certain makes and models, and you need to know this ahead of time.
Before you go looking at cars, ask your insurance agent about the makes and models you are considering. He or she is there to help you and can give you a good idea of what to expect.
2. Student Auto Insurance Discounts
Your teen may qualify for discounts on car insurance. For example, some companies offer discounts of ten percent or more when insuring teen drivers with good grades in school. This is sometimes called a “good student discount”. This benefit can be a motivator for your teenager to continue to do well in school.
Good student rates can also apply to college students and the savings can be substantial.
3. Driver Training
You may receive an auto insurance discount if your young driver passes an approved driver education course. Some programs offer defensive driving training and this can give you lower premiums too.
4. Coverage Options For Insuring Teen Drivers
A first car may be several years old and you may not want to pay for full coverage. However, in some cases, you might have to and here are some of the factors to consider:
- If you finance the purchase you must fully insure the car.
- When you owe nothing on the vehicle, you only need liability coverage in most states.
- It’s vital to understand liability limits and other coverage options.
Why You Need Full Coverage
When you borrow money on a car, it becomes the loan collateral. Lenders want to lower their risks by having you fully insure the car. If the car is severely damaged or totaled, the lender will receive proper compensation from your auto insurance company.
Risks with Minimal Liability Coverage
In some states, you only need ten or fifteen thousand dollars of liability insurance, but taking out the minimum is full of risks. If your teen is ruled at fault for an accident with damages and medical expenses, the costs could be $100,000 or more. When this happens, the insurance company pays and you must make up the difference. That’s why should consider at least 100/300/100 liability or even greater.
100/300/100 pays up to $100,000 in medical expenses for one person and $300,000 total for each incident. It also pays as much as $100,000 for personal property damages. This can include damage to other vehicles, street lights, and other things.
Full Coverage Vs Liability Only
If you decide to drop full coverage, you can get rid of the most expensive coverage, which is collision insurance. However, don’t be too quick to drop comprehensive, because it is not expensive and pays for claims like:
- Fire
- Theft
- Tree damage
- Hail damage
- Flooding
- Animal damage
It’s a good idea to consider uninsured/underinsured motorists insurance. This coverage makes up the difference when the other driver is “at fault” and does not have sufficient insurance. It also covers you for hit and run damages.
5. Consider Part-time Driver Rates
Do you have more drivers in the household than cars? Maybe an elderly relative lives with you. You may be able to list your teenager as a part-time driver while he or she is attending school. In fact, special rates may apply to students attending college out of town and they only drive when they are home.
6. Driver Monitoring Devices
Many insurance companies offer discounts of ten percent and greater for installing driver monitoring devices. They track issues like speed, seat belt usage, and other driving habits. This can save money on teen car insurance and help to avoid needless accidents and traffic tickets.
Additional Points to Ponder When Insuring Teen Drivers
If you look into car insurance for teens before shopping for cars, you may avoid lots of headaches. Special car insurance discounts for students are available, and before dropping coverage, look at your options. Check into part-time driver rates and think about driver monitoring discounts. Ask your auto insurance agent about the best ways to save money on your teenager’s car insurance premiums. He or she is there to help you and provide valuable auto insurance tips and advice.