Should You Give Your Teenager the Keys?
When they’re babies you can hardly imagine that your kids will one day be independent adults. But before you know it, that sixteenth birthday arrives, and the adult responsibilities and freedoms of driving go along with it. Or do they? Unfortunately, adding a teenage driver to your auto insurance policy can mean a big rate hike for you. But there are some tactics you can use to keep the rate hike as low as possible.
Insurance companies offer a number of discounts for their loyal customers. You may already be familiar with multiple-car discounts and safe-driver discounts, but here are a few others that your insurance company might have that could apply to your teenage driver:
• good student discounts—generally offered to students who maintain a B average or higher
• driver’s education—given with proof that your teen completed a driver’s training class
• insurance safety incentives—may be offered in conjunction with the addition of monitoring devices in your car to ensure your teen is driving responsibly
Choose Your Teen’s Car Carefully
You may be thinking of giving your teen a car for his or her birthday. Or maybe your teenager has plans to buy a car. Whether the car is brand new or an old clunker, some models just cost more to insure than others. Older cars are usually worth less than older ones, so they cost less to insure. Additionally, if you own the car outright, you aren’t required to buy full coverage on the vehicle. On the other hand, a car with safety features such as airbags and antilock brakes can merit discounts that some older cars may not qualify for. Some car models are magnets for thieves, and are more costly to insure. Other cars have a higher rate of accidents. Think twice before you select a car. Your agent can tell you how much it will cost to insure your drivers on each vehicle.
Changing Insurance Coverage
If you aren’t happy with the quotes you’ve received from your current agent, it might be time to look at other companies. Study your state’s requirements first, and determine how much insurance you want to have. That way, when you receive quotes from other companies, you can easily compare them because they will be for comparable levels of coverage. If you get a quote for high coverage from one company, and minimal coverage from another, it will be difficult to know which company will give you the most for your money.
Once you know what your state requires, you can make some adjustments. Some people increase their deductibles in order to lower their premiums. A good rule of thumb is to keep your deductible at a level that you can reasonably cover if you should need to.
But resist the temptation to cut too much. Especially with your child out there on the roads (or the sidewalks), you’ll want to make sure your coverage is adequate for your needs.
Making It Work for You
Having another licensed driver in your home does have its advantages. You’ll have more time because you won’t have to drive your teen around anymore. A teenager with a license is often glad to run errands and help in other ways just to have a legitimate reason to be behind the wheel. And driving helps your teenager learn responsibility. The insurance costs for new drivers may be high, but they can be made lower. And the benefits of your teen becoming a driver can be priceless.
Author Sandy Landsford is an accountant and blogs for carinsurance.org.uk, a site where you can get cheap car insurance. Get a quote today!