How to Lower Car Insurance Rates for a Teenage Driver

The day you’ve always dreaded is finally here. You’re getting ready to add your teen driver to your car insurance policy and bracing for the huge premium increase thanks to Junior’s inexperience behind the wheel.

We can’t blame car insurance companies for charging more to insure our teenagers. The freedom and independence that comes with a driver’s license definitely lends itself to pushing the limits when mom and dad aren’t in the car. Those “let’s see if the tires spin” moments can easily result in minor fender benders, not to mention the distraction of texting, selecting MP3’s and of course the vocal back seat full of friends.

The combination of all these distractions would be too much for an experienced driver, much less for a teen driver who doesn’t have the “say no” ability that comes with maturity.

Statistics show very clearly that teen drivers represent an increased risk for accidents, and car insurance costs more when you have one or more on your policy. The higher the risk profile of the drivers on your policy, the higher the likelihood of having a claim, and hence the higher cost to insure your cars.

But what can you do to lower your car insurance rates when you have a teenage driver on your policy?

It depends on how your insurance company rates drivers to vehicles. Some companies rate specific drivers to specific vehicles. This means that if mom drives the minivan, she is rated as the primary driver on that vehicle, and the rate charged is based on her age and driving record.

If Junior drives the ’92 Ford Taurus and is listed as the primary driver for that car on the policy, then the premium charged for each coverage will be based on his/her age and driving record.

Of course your teenage has dreams of getting that shiny new Mustang GT or Camaro SS with a big bow on top for their sixteenth birthday, but be forewarned that the higher the performance of the car your teenager driver, your insurance rates will increase exponentially.

By purchasing a low profile older vehicle for your teen that you can insure for liability coverage only or have very high comprehensive and collision deductibles, you can help bring down the insurance cost substantially.

As a comparison, if your 16-yr-old drives a high performance vehicle with full coverage, you could pay well over $1,000 every six months for coverage. If you choose a low profile vehicle and insure it for liability only, you could be paying as little as $200 every six months for coverage. This is a huge difference all based on rating your teen on a different vehicle.

Not all companies allow you to rate a specific driver to a specific vehicle however. Some use what is known as “driver averaging” to rate drivers. Insurance companies know that occasionally Junior will take dad’s Cadillac Escalade for a spin. If your teen is rated on the low profile beater, but wrecks dad’s expensive SUV, the insurance company still has to pay the claim. So they resort to using a driver averaging method to determine your car insurance rates.

The driver averaging method allows insurance companies to charge a higher premium across all vehicles on a policy rather than only on one vehicle. You can still rate drivers as primary on certain cars, but the premium increase from the teenager is evident for all vehicles.

If your current insurance company uses driver averaging for rating purposes, there are some tips that can still help reduce your teen driver premiums.

• Have your teenager complete a driver’s education course. Many companies give discounts for qualifying training courses.
• Good grades can earn discounts. Stipulate that in order to keep their driving privileges, your teen must meet a certain grade criteria. Some companies give “good student” discounts for teen drivers, even through college.
• Don’t get tickets. If you really want to see a high car insurance rate, let your teen get a couple of tickets. Teen drivers are high enough risk, but any violations on their driving record is proof enough to the insurance company that they are at a high risk of causing an accident and you’ll get charged accordingly.
• Don’t get into accidents. As with traffic violations, any accidents caused by your teen will cause your rates to skyrocket.

If your teenager can drive safely, earn decent grades in school and keep their driving record clean, it will really help out your pocketbook when you get your insurance renewal.

If you’ve already added your teen driver and found the rates to be too steep for your liking, you can always shop your coverage around to other companies. There’s no reason you have to stick with a company just because you like the agent or their TV commercials. Any money saved on car insurance is money that can be saved or better spent on other necessities.

If you’d like to see how your current rates stack up to the competition, click here to get a quick rate comparison. It only takes a few minutes and you could save substantially on your teen driver car insurance rates.