If you have a teen (or two) at home and they’re getting ready to get their license for the first time it’s understandable if you become a nervous wreck.
Especially if they’ll be driving your car.
Aside from worrying what steps can you take to make sure they are safe on the road? Consider signing them up for a driving safety course, whether in person or online. In fact, the National Safety Council recommends the defensive driving course “Alive at 25 Teen Driving,” which is ideal for young drivers aged 15 to 24.
Tips for insuring your teen driver
When it comes to insuring your teen how can you make sure you get the insurance you need without watching your premiums skyrocket?
Here are 3 tips you can follow…
Increase your deductible
You probably already know that the deductible is the amount you have to pay before any claim payments are made on your behalf. And you may know that the lower your deductible amount the higher your premium payment.
What you may not know is that you increase your deductible to offset the cost increase of adding a teen driver to your policy.
The cost savings typically amounts to 15 to 30% off your collision and comprehensive coverage.
Plus, you can add special features to your policy like “glass replacement” which would cover repair or replacement of your windshield (a common occurrence) should it get damaged without you having to pay a deductible.
Place them on a separate policy?
Some people think that it makes sense to place your teen on their own, separate policy.
The thinking is that by doing this your auto insurance premiums won’t go up at all. However, though in theory this may be true, at the end of the day the overall cost will be much more by having two policies (or more) in your household then simply including them on your auto insurance.
Because insurance rates on teen drivers are much higher than they would be for someone who is older, and your teen most likely will not qualify for some (or any) policy discounts. So the overall costs of two separate policies is typically much higher than simply adding your teen to your policy.
To make matters worse, some parent cut corners on costs by reducing the policy limits for their teen as a way to save money.
By getting auto insurance with liability limits set to the state minimums you place your teen, and your family, in financial risk should your teen find himself or herself in a lawsuit should there be a substantial claim because of an auto accident.
And though you may think that you’ll be shielded from any legal claim, the reality is that as long as your child is living at home or is listed as a dependent there’s a good chance that you could find yourself entangled in any such lawsuit.
The best way to insure your young driver is to add him or her to your policy without cutting corners on liability limits.
Pay attention to policy discounts
Remember the driving safety course mentioned at the beginning of the article? Well, many insurance companies will offer you a discount when your teen successfully completes such a course.
But there are a host of other possible discounts available to you, such as:
- having a good credit rating
- good student or at-school discounts
- multi-policy (i.e. “bundling”)
- paying your insurance premiums annually
Premium costs are driven by potential risk (no pun intended).
That’s why teen drivers pay more for the same insurance then someone who is older with little or no claims history. And this is why it ultimately doesn’t make sense to set your teen up with their own policy. Dollar for dollar they will be paying much more on their own, not to mention missing out on a range of possible discounts that are available to you (such as having good credit).
At the end of the day it makes sense to speak to a knowledgeable insurance agent regarding what policy and policy options make the most sense for you and your family.
Contact us for a policy review or quote today
Do you already have auto insurance coverage? Or do you need a new policy?
Either way BDD can help you get the insurance coverage you need at the right price.
You can call our office at 800-660-6934 or contact us online for a complimentary policy review. This will help to identify any gaps in coverage, and will ensure that you have the right insurance for the right price.
Or simply get a free, no-obligation quote today.
Either way our team of insurance professionals are here to make sure you get the financial protection you need.
We are licensed NY, CT, NJ, RI, MA, PA and FL.