How to Choose Auto Insurance Coverage for Your Teen

Few parents are prepared to have a teenage driver in the house, so it is no wonder that they are surprised to find the costs of their insurance rising through the roof. Without adequate planning and research, any car insurance policy is likely going to be more expensive than necessary, even without a teen driver.

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The process of choosing an auto insurance provider for your teen is broken into a few steps. There are some steps that should be taken before your teen is licensed and driving solo, and some steps that are a part of the search process itself.

Putting in a little legwork will pay off in the long run. It is also a great way for your teen to utilize their research and technology skills, all while learning about the high costs of the responsibility that accompanies driving privileges.

Teens and Risk

If the high cost of teen car insurance comes at a shock, the numbers behind the expensive insurance is even more shocking. Teens basically have a higher risk of having a claim because they are more likely to get into an accident.

The Centers for Disease Control maintains that teens are four times more likely to be in a crash; over 350,000 were injured in 2009 seriously enough to need to go to the emergency room.

However, the statistics don’t end there. Not only are teens more likely to be in an accident, they are also more likely to be in a really serious accident. According to data from the National Highway Traffic Safety Administration (NHTSA), motor accidents are the single leading cause of death in drivers aged 15 to 20.

Teens are more likely to engage in dangerous driving behaviors that lead to accidents, such as speeding and distracted driving through texting, music, friends, etc. Furthermore, they are also less likely to use safety equipment that reduces injuries in an accident, such as seatbelts. Combining both behaviors adds up to high injury rates and staggering fatality rates for young drives.

While, as a parent, you want lower car insurance rates for your teen and family, no doubt your primary goal is to make sure that your teen driver does not add to those statistics above. Thankfully, safe teen driving leads to lower car insurance rates, so one will help to achieve the other.

Ensuring that your teen has the knowledge to drive safely, as well as the motivation to drive in a safe manner, will lead to lower car insurance rates. Teens themselves have to be invested in being a safe driver, or nothing will change.

Teen Drivers, Cars, and Coverage

First, you have to decide whether a teen will have their own car and insurance coverage, or if the teen will be added to your insurance coverage, with or without a personal vehicle. If the young driver is under 18, then they will have to be on your insurance policy, as they cannot yet sign the contract necessary to purchase car insurance coverage. Similarly, if the teen owns the vehicle, then they will have to get their own insurance policy.

Generally, adding a teen to your insurance policy is the cheapest option. Your car insurance rates are likely to go up either way, as many states allow insurance companies to factor in the risk of all likely drivers in a household. If you have a teen driver in the house, your insurer could raise your rates based on your teen’s risk.

In Maine, insurers can automatically add a teen to a parent’s policy as soon as the teen gets a permit, according to the Maine Bureau of Insurance.

If your teen is to have their own vehicle, try to find one that has high safety ratings. Not only do safer vehicles help to protect your teen’s safety in the event of an accident, they also garner lower car insurance rates. Use independent ratings such as those from the NHTSA or the Insurance Institute for Highway Safety. Both have past safety ratings to utilize if you are looking at a used vehicle for your teen.

You want to ensure that you have full coverage on any vehicle that is worth more than a couple thousand dollars. Odds are that your teen will be in some sort of accident, and you need to make sure that you have covered all ends. Full coverage encompasses liability insurance limits that are higher than state minimums, collision and comprehensive, and additional costs such as towing.

Follow Graduated Driver’s License Guidelines

One of the best things you can do to ensure your child’s safety when driving a car is to give them as much experience behind the wheel as possible. Many states utilize graduated driver’s license programs recommended by the NHTSA; they basically extend the time from turning 16 to being licensed. That time is filled with additional driving practice, rules for driving, and safety classes.

If your state does not employ a graduated driver’s license program, feel free to institute one of your own. The exact guidelines can be found on the NHTSA’s website, though no state follows them exactly. Basically, your teen must get in so many hours of driving practice, take a driving course, and then get a provisional license prior to having full driving privileges.

A provisional license comes with a set of rules that your teen must follow, such as limiting the number of other teen passengers in the vehicle, banning the use of cell phones while driving, and restricting driving after dark. According to the graduated driver’s license, most restrictions do not lift until the teen turns 18.

Set Expectations and Consequences

Before your teen has passed their written test and gotten a driver’s permit, you need to set your rules and expectations and spell out the consequences for breaking those rules with your teen. These are not anything to just pay lip service to; they may very well help to keep your teen safe and alive while driving.

Set rules for speeding, texting, having friends in the car, and where the teen is not allowed to drive, such as on the highway.

Additionally, holding your teen accountable for their driving privileges is also important. For instance, you should require good grades in school, as they will help you both to get discounts. Add in any other requirements that you deem necessary.

Some parents even require their teens to assist with paying for their vehicle and insurance. You should weigh the pros and cons of your teen getting a job to help pay for their vehicle and insurance. Regardless of what rules you set, also set accompanying consequences so that it is perfectly clear what will happen if a rule is broken, and then stick to it. Loss of driving privileges for a set amount of time is one place to start.

Find Insurers that Are Teen Driver Friendly

Once you feel that your teen is responsible enough to start the process of becoming a full-fledged driver, you will want to look for car insurance providers that are teen-friendly. Going with your own insurance company is certainly an option, but you will want to review all of your options, not just one.

Teen-friendly insurers have programs just for young drivers aimed at reducing crashes and lowering car insurance rates at the same time.

Some insurance providers have also embraced new GPS tracking technology, offering it as a way for parents to monitor teen driving and keep rates down.

A device is fitted into the vehicle’s computer, and it records data such as the speed of the vehicle and how often the driver has to apply the brakes in a hard manner, as could happen when they’re following too closely or not paying attention. Those young drivers who are shown to following driving laws and rules get lower rates.

Additionally, most providers offer safe driving courses that teens can take to get a discount, while others offer good student discounts for a B average or better, according to the Insurance Information Institute.

Compare Quotes for Coverage

Once you have identified a few insurers that offer young driver programs and discounts, then it is time to compare prices for coverage. Getting quotes from different providers is the only way to know how much they will charge for coverage. Get quotes for coverage from your insurance company, as well as a few others. All experts agree that comparing multiple quotes for insurance is the best way to get the lowest rate.

Make sure you get rate quotes for exactly the same amount of coverage, ensuring that you can compare your quotes to one another equally. Take care to factor in discounts and any future savings, such as from a discount for when a college student is away at school.

Of course, these are all steps that you should be making with your teen right beside you. Understanding everything that goes into car insurance is the first step to being a safe and responsible driver!

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