Trimming Teen Car Insurance Costs

how to minimize teen car insurance costs

Inexperienced drivers present a major danger on the road, to themselves, their passengers and other drivers. Study after study shows that younger people in particular are far more likely to be involved in a collision than any other group of drivers.

In particular, during the first six months of being licensed, young drivers are eight times more likely to be involved in a fatal crash than more experienced drivers, according to the Traffic Injury Research Foundation.

So, it shouldn’t be all that surprising that car insurance costs for teen drivers are typically much higher than average — particularly for younger men.

Young Female Drivers Get A Break

Premiums are a bit lower for young female drivers, since they’re perceived as being more cautious than young males and therefore a better investment. Not only do women have fewer accidents, but those incidents usually don’t involve as big a payout, according to industry statistics.

Over and above telling them to forget about driving for a few years — premiums for first-time drivers drop significantly around age 25 — there are several ways you can reduce the extra costs associated with insuring a teen driver.

Add your teen driver to your existing policy rather than putting him or her on a separate policy, and list all younger people as occasional rather than primary drivers.

The increase in your family’s premium likely will be less than what you would pay for your teenager on a separate policy, and the family can also benefit from any multi-car discounts that are available.

Be Sure To Be Completely Honest

Keep in mind that adding teenagers to an existing policy only works if they just drive occasionally. If they’re really the main driver, or are actually the owner of the vehicle, you’re looking for trouble by ‘fronting’ them this way.

Insurers generally have little problem identifying this sort of manoeuvre. In the event of an accident, they can refuse to pay out all or part of the claim or even cancel the policy altogether since you’ve essentially misrepresented your family’s circumstances.

You’re also putting your own driving record and claims history at risk which could have longer-term implications for your own coverage in the future.

Accentuate All Those Positives

Be sure to document your teen driver’s good grades. Many insurance companies offer discounts to teen drivers with a good track record, so if your child is getting decent marks, be sure to inquire about good-student discounts. In some instances, the savings last even after they graduate from school, usually until age 25.

At the same time, sign them up for driver’s training. Not all provinces require new drivers to complete an official driver’s training course. Nonetheless, you should consider enrolling your son or daughter. Sessions range in cost from $500 to $900, depending on the location.

Aside from helping them get a head start on road safety, this sort of certification could help trim those premiums a bit further.

Readjust Your Coverage

Naturally, your teen driver wants something decent to drive. But high-end cars are the most expensive kinds of vehicles, particularly for young drivers.

A used family sedan with a four-cylinder engine, solid crash-test scores, and low repair costs is a better choice, advises J.D. Power and Associates. You’ll save money on insurance, and your child will be better protected if a collision does occur.

If you do opt for an older car, consider dropping collision and comprehensive coverage since it may be worth little more than the deductible. You can easily find yourself paying more in premiums on an older car than you could ever get back from the insurer, even if it were damaged by your young driver.

 

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