Car Insurance for Teens – What Parent Need to know?

teen-insuranceNobody enjoys paying for automobile insurance specially to teenagers. We all know that insurance for teenagers or car insurance for teens are much higher due to that they are new and inexperience drivers. As a matter of fact, car insurance rates are rising due to inflation — new car prices, repairs, personal injury lawsuits, and health care cost have all jumped dramatically. The auto insurers have passed these costs on the buyers.

I’ve learned that we can keep our rates down for experience and teenager drivers by following these tips:

1. Choose the Right Car.

Make insurance costs a part of your criteria in selecting a car. You may be able to afford the car, but can you afford to insure it? The cost of insurance is influenced by the driver of the car, and the make, model, and year of the car. High-performance cars cost the most of purchase, replace, and repair, and they are stolen more often than “family cars.” They are also commonly driven by people who are higher risks and most of them are teens.

2. Find Ways to Pay Lower Rates for Teenager Drivers.

Insurance industry recognizes that accidents happen more among the age 16 to 25 years old. Because if these statistics, insurance for teens are much higher compared to older people. A teenager driver often qualifies for a lower rate by the following:

  • Keeping a school grade point average of at least a B, which may provide a 5 to 25 percent discount.
  • Taking driver’s training course will give an additional 5 to 10 percent discount.
  • The teens being insured as an “Occasional Driver” on a family car rather than a “Principal Driver” on his or her own car. If the insurance company sees more drivers than cars, they may allow the teenager driver to qualify as an occasional driver. However, if the number of cars and drivers is equal, it is hard to avoid the principal driver classification and higher car insurance for teenagers.
  • Getting married (if the insured teens is female). Teen driver are those under 25 (sometimes 30) years old. But young women who marry by age 25 are rated as adults.

3. Teens must Maintain a Safe Driving Record.

Most insurance companies give discounts after three to six years of driving without a chargeable accident or a moving violation. If either appears on your driving record, you or the teen may pay additional premiums for three years.

4. Recognize that replacing a car, the new car inherits the insurance record of the old car.

This means that the insurance pays the total replacement value of the new car and the new car carries the insurance record of the one that was replaced.

5. Your Location Impact Your Insurance Rates.

Where you live definitely affects your insurance rates, though it hardly makes sense to move into the country from the city to reduce your insurance rates!

6. Understand Liability Insurance.

Never be under-insured. Each state or province has minimum requirements for liability insurance.  Remember, you can’t choose what kind of car you may hit or driver you may injure. If you hit a Camaro and have only $100,000 in property damage insurance, you may be responsible for an additional $150,000 of repair cost. If you injure or kill a professional such as a medical doctor, the courts may assess a large “loss of earnings” claim against you. Your $50,000 of minimum liability won’t go very far. Spend more insurance dollars on liability coverage rather than on comprehensive and collision coverage. Consider an umbrella policy [a supplement to the liability coverage on your auto or home insurance policy that kicks in only after other policies have run out.] in additional to your automobile insurance. Most agents would recommend at least $100,000 per person and $300,000 per accident for personal liability coverage and $300,000 for property damage. Even higher coverage may be wise if you regularly carry others (school teams, groups, etc… ) or if you have a significant net worth or income and may be the “deep pocket” target of a lawsuit.

7. Raise the deductible on Collision and Comprehensive.

If you can save a guaranteed $100 on your premium versus the possibility of paying an additional $100 on deductible, it’s an even trade. If you are a safe driver, the odds are that you will come out ahead. If you raise your deductible from $100 to $1000, be sure you bank the premium savings, which will probably not be $900, so you can pay the deductible in case you are involved in an accident.

8. Shop the Market

Rates are competitive, but make certain you compare “apples to apples”. Great differences exist between companies in their service, products, ability to do on-site claims, etc. You may save money dealing with a less expensive company, but be sure you know what you are giving up. It often pays to develop a long-term relationship with an insurance agent and a company. In the event you get into a bad situation, they can help you consider all your options.

Some of these options may not apply to your situation especially car insurance for teens; others may require some thought or research. A little of your time could save you a lot of money.

1 Comment

  1. Pingback: Suggestions in Selecting Car Insurance for Teenagers | Today Topic that Needs to be Discuss

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