Auto insurance for teens is generally expensive. On average, an 18-year-old motorist in the U.S. pays about three times more for auto insurance coverage than a 40-year-old motorist. Moreover, adding your teen driver to your auto insurance policy will likely increase your rates, says the Insurance Information Institute (III).
However, there are effective ways to potentially reduce the rates. Some common methods of reducing the cost of auto insurance are to eliminate optional coverage, increase deductibles, and decrease coverage limits. However, if you opt for these methods, your teenage driver may end being underinsured. You may end up spending more money if your teen is involved in an accident.
Some of the reasons why cheap car insurance for teen drivers isn’t always enough include:
Relatively Low Minimum Auto Liability Coverage Limits
Most states have a set minimum liability coverage limit. However, this minimum amount is usually inadequate. Imagine this, if your teen driver damages property or injures someone and the cost of the damage exceeds the policy’s limit, you may have to pay the difference out of pocket, meaning you could potentially lose your assets, including your savings and home equity.
No Supplemental Coverage
Some types of auto insurance coverage are optional. For instance, if your family vehicle is already paid off, you don’t have to pay for collision coverage. However, what if your teen hits an object or another vehicle while driving your car? If you opted out of collision coverage, you would have to pay your vehicle’s repair costs out-of-pocket.
Higher deductibles typically mean lower premiums. However, if your teen is involved in an accident, you will have to pay the high deductible before the insurance kicks in and reimburses you up to the coverage limit.
How to Save on Car Insurance for Young Drivers in 2021
The reason car insurance for teens is so expensive is that teens are more likely to engage in high-risk driving behaviors, says the Centers for Disease Control and Prevention (CDC). However, you can reduce the cost of insuring your teen without reducing your insurance coverage and thus exposing yourself to medical bills and high repair bills. Here is what you can do:
- Enroll your Teen in a Driver’s Education Course – Teens who take a certified education course usually enjoy lower auto insurance premiums.
- Good grades – Encourage your teen to get good grades. Most insurers offer discounts to high school and college students, between the ages of 16 and 24, who have a B average or a 3.0 GPA.
- Choose the right car – Whether you’re buying a car for your teen or the family, if you want to lower your premiums, you should consider a car with a high safety rating. A “non-sporty”car with up-to-date safety features will attract lower premiums.
- Distance student discount – Many insurers offer discounts to students who live a given distance from school. You may also be eligible for the distance student discount if your teen driver doesn’t live at home or rarely drives the car.
- Low-mileage discount – This discount is similar to the distance student discount. If your teen only drives a small number of miles per year, they could be eligible for a low-mileage discount.
- Telematics – Some insurers offer devices that enable you to track your teens’ driving habits. The information gathered, which includes speed, miles covered, and how often they apply brakes, can potentially lower premiums.
Cheap car insurance for teen drivers isn’t always enough. If you’re looking for a solid auto insurance policy that’s appropriate for your teen motorist, talk to the team at Tompkins Insurance Agencies. We can help.