Adding a teenager to a car insurance policy is costly. If done correctly, however, there are ways to reduce those costs. Here are 5 ways to find the best car insurance for teens.
Having a teen who can drive is a big adjustment. There’s helping them learn to drive and the worrying when they are on the road. And then there’s the rise in auto insurance rates, which you’ll notice immediately.
It’s no secret that teen drivers are pricey to insure. Research from AAA shows that teen drivers are three times more likely than adults to be involved in a fatal crash. Insurance companies know that teens are riskier to insure than older drivers.
The good news is that there are some steps you can take to keep rates under control.
The Basics of Buying Car Insurance for Your Teen
Every driver is required to be covered by a car insurance policy. A teen won’t automatically be covered under your policy just because they are a dependent. You have to add them to your policy.
It’s going to be cheaper in almost every case to add a teenager to your existing policy than it would be to purchase a separate policy. However, you’ll still want to do a little bit of research.
The first step is reaching out to your current insurance company or agent. It may be a good idea to reach out as soon as your teen gets a permit. You may not be required to add them to your policy until they have their license, but this varies from one insurance company to another.
Here are the steps to take to make sure your teenager has insurance waiting as soon as a driver’s license is issued:
- Get a quote from your insurance company for adding your child to your existing policy
- Get a quote from at least one other agency to see if you could get a better rate than what you’d pay with your current company
- Add your teen to your policy once a driver’s license has been issued (or earlier if required)
It may be possible for your teen to purchase a car and obtain insurance alone. However, state laws will determine whether or not this is a possibility in your case. Minors generally can’t own property or sign insurance contracts without at least the consent of a parent.
Comparing Auto Rates
Adding a young driver to your policy is a perfect time to compare insurance rates. Here are several of the best auto insurance options for teens:
USAA: For those in the military or with qualifying family members who serve, USAA offers excellent rates. It also offers a good student discount for high school and college students.
GEICO: Best known for its commercials, GEICO offers low rates by selling direct to consumers. Unlike most other insurance companies, it doesn’t have an army of agents.
Progressive: If your teen driver is particularly safe on the road, Progressive’s Snapshot may be a real money saver. It tracks the operation of the car for a period and may offer discounts based on the results.
State Farm: They offer significant discount opportunities for young drivers. These include safe driving discounts, good student discounts, and driver safety discounts.
Allstate: Finally, Allstate offers a good grades discount. It also offers what it calls a teenSMART discount. According to Allstate, you can save “up to 10% when your young [driver] successfully completes the teenSMART driver education program.”
Getting Insurance When a Teen Belongs to Two Households
The parent with primary custody is typically responsible for adding a minor driver to a policy. However, some laws or insurance policies may require both parents to provide insurance for a teen driver. Talk to your insurance agent to make sure you understand the rules.
The Car Your Teen Drives Will Help to Determine Your Rate
Parents can expect to pay an additional $671 annually once they add a teen driver to an auto policy. One way to get the best rate possible is to assign your teen to the cheapest vehicle you own. You can also shop around for vehicle models with low auto insurance losses if your teen needs to purchase a new car. Vehicles with low losses are far less expensive to insure.
The 100 Mile Rule
For college students, they can save by leaving the car at home. If your student goes to school more than 100 miles from home but leaves the car at home, most insurance companies discount your premiums.
Don’t Forget to Get Discounts
While you may be dreading paying more to have a teen driver in your household, there are many opportunities to get discounts. Here are some of the more common discounts offered by many insurance companies:
- Good student discounts (typically requires a ‘B’ average or better);
- Snapshot or other driver evaluation technology
- Multiple car discounts (one reason it’s usually best to add a teen to your policy)
- Completion of Driver Safety Programs
- 100 Mile Away discount (for college students)
Your auto insurance agency may even offer a discount if your teen signs a driving contract and promises to always wear a seatbelt, call for a ride when impaired, practice good car maintenance, and never text or eat while driving.