Adding a teen driver to an insurance policy is enough to cause grief to parents of the most responsible adolescents. Due to high risk and an unproven driven record, premiums can spike as soon as the new driver is added to the policy. We show you several ideas that may reduce your car insurance costs, and provide a few more hours of sleep! You may be able to save between 20%-50% off your premium, and take advantage of carrier discounts. Often, these discounts will continue when young drivers become adults and begin their own policy.
Most companies offer special pricing to drivers under age 21 to help reduce costs. Practicing safe-driving techniques saves money and lives. The money-saving options listed below can be used for all vehicles in all states. Availability and amount of rate reduction may vary in different states and with different carriers. Additional reductions may be offered to group policyholders through their employer.
Prepare In Advance
As your teenager gets closer to getting their permit, (a few months), begin investigating policy options. Contact your current carrier and get an accurate quote, and then use the figures to compare other online prices from different companies. Typically, you should compare offers from three different companies. Since levels of discounts and youthful pricing can vary, you may find several carriers with more competitive pricing. Good student and student away reductions can vary from one insurer to another. The number of violations and at-fault accidents of other drivers in the household may also impact the cost of a young person's coverage.
Do not wait until the last minute, such as the day they obtain their permit, because this is likely to result in a quick choice made for the sake of safety and compliance, and may not be the best deal for you financially. Comparing prices of other insurers will not cost you money, and shopping is recommended every other year. Carriers regularly change prices, especially for younger drivers. Typically, rates are adjusted every 12-18 months. Younger drivers often have their driving records checked more frequently. A major violation will be flagged much quicker, and will stay on the driving record longer..
Preparing ahead will also help you determine what discounts, if any, are available for teens. For example, many companies will offer a discount to new drivers with good grades. Have copies of recent report cards on hand for verification. This can also be an incentive for students to maintain good grades if they are partly responsible for the cost of their car insurance. This makes the biggest difference when they are under the age of 19. First-year drivers are susceptible to larger increases when an at-fault accident occurs.
The NHTSA teen driving website provides free information on state licensing requirements, and additional recommendations that help parents prepare for the new driving experience in the household. Distracted driving, misuse of alcohol, and other topics are discussed. BAC (blood alcohol concentration) limits can vary from one state to another.
Usually, a “B” average will reduce premiums by as much as 10%-20% on the vehicle they drive. If they are currently college students, a rate reduction will still be available. A copy of the most recent transcript will be required. Faxing, emailing or sending (through the mail) the paperwork is acceptable. Junior college and local community college courses are generally accepted. Virtual online course grades also are acceptable from an accredited college. Medical School grades are generally not considered.
Sometimes the discount will apply, even if the existing semester GPA, is less than 3.0, while the overall GPA is above 3.0. Each insurer has unique criteria for the eligibility and amount of discounts. When classes are moved online because of a pandemic (COVID-19 or others), the discounts will still apply. Online coursework generally does not qualify for rate assistance.
You may also qualify for a "student away" discount, if more than 100 miles away from home. However, there are carriers that apply an additional discount as long as they are staying at the campus, regardless of distance. Coming home for major holidays (such as Christmas and Easter) is acceptable. But the discount can be forfeited if the total time spent at home exceeds 30-60 days in a calendar year. If your child takes the vehicle with them, the discount is not offered.
Basic Safety Tips
Slow down. Of course, this is the most obvious tip, but yet, it remains one of the biggest causes of accidents and claims. Also, speeding tickets on a young driver's MVR can substantially increase the premium. Multiple violations may result in a high-risk designation.
Clean the windshield. Adults regularly spend the needed five seconds to press the button to squirt the windshield and let the wipers do their work. New drivers often don't even know where the button is! Also, ensure that the inside windows are periodically cleaned. Spraying windows monthly will make a big difference on foggy and rainy days. Leave extra time for defrosting during mornings in the Winter months.
If the traffic light turns green, wait a moment and look first. Once again, it's typical behavior for adults, but many teenagers simply take off without checking for possible oncoming traffic. This is especially important for intersections in high-traffic areas. Many fatalities occur at these types of intersections.
Pass vehicles with caution and only when necessary. Because of the unpredictability of other cars on the road, along with basic unfamiliarity with many areas, passing vehicles should actually be avoided, unless absolutely needed. Generally, the time saved is nominal. During adverse weather, passing another vehicle becomes more dangerous.
Avoid driving in the snow without prior experience with adverse conditions. As a parent, teaching and training our children about the impact of snow and ice on road conditions is critical. It only takes an inch of snow (or less) to create a hazardous driving condition. And often, ice (or black ice) can not be seen.
Use your turn signals. When other drivers are behind you, a turn signal will generally keep their vehicle at a safe distance from your vehicle, and substantially reduce the risk of an accident. Turn signal lights should be periodically inspected to ensure they are working properly.
Keep Your Headlights On
Although many newer vehicles have an automatic setting for keeping headlights on at all times, they may have to be turned on manually for other vehicles. Your viability also increases, and other drivers can more easily see your vehicle from longer distances. Dusk and early in the morning are times of the most important time of the day to utilize your headlights.
Consider An Older Car
If your teen driver is just learning, an older car with high safety ratings is likely to be associated with lower premiums than a new vehicle. Of course, teenagers just getting behind the wheel may argue that they are entitled to a new car, but it's better to allow them to learn in an older vehicle, and transfer those good driving skills to another car at a later date. If you're looking at several different possible used cars, you'll be able to get an estimate from the insurance carrier about the anticipated cost. If the newly-purchased vehicle is not financed, collision and comprehensive coverage will not be required.
If you're searching online or visiting a dealership, keep a list of all the vehicles you're considering. You might be surprised about the potential differences in insurance among those cars and that can help inform your buying decision. And here's a tip from a father of two teenagers: Don't let your kids decide what type of car to get! Otherwise, you'll end up with a bright red sports car just about every time. Or a bright yellow small SUV.
Specific Vehicle Recommendations
Our favorite is a small SUV because of the combination of safety and cost (both vehicle and insurance). Several of the best options (SUV and non-SUV) are listed below:
Hyundai Santa Fe
Hyundai Santa Fe Sport
Although we do NOT (of course) recommend moving to another state just to lower your premium, we do monitor auto insurance rates in different states. As you may expect, many less populated areas have the best options. But there are many exceptions. If you are planning on moving, we can estimate the approximate rates in your new area. FYI -- For 2023, the most expensive states to add a teen driver are Maine, Rhode Island, and New Hampshire, while the cheapest states are North Carolina, New York, and Hawaii.
Depending on the drivers and vehicles on your current policy, it may be less expensive to purchase an older car with only liability coverage, instead of assigning your son or daughter to a much newer vehicle already on the policy. Sometimes, this works best with males, who cost much more. But you would not want to title the vehicle in your child’s name. At least, not yet! When your child is living in a separate household and filing their own tax return, they should be placed on a separate policy.
Play A Role In Driver’s Education
One of the best things parents can do is play a role in how the teen learns to drive and how responsible they remain as new drivers. An at-fault accident in the first few months can substantially increase premiums, and diligence in learning and preparation can be critical in developing the long-term safe driving skills. The combination of moving violations and at-fault accidents may result in a temporary license suspension.
Obviously, it’s always a good idea to take advantage of any school-sponsored driving programs. Take the time to practice with your child, and when you’re done, practice some more! It will pay dividends for many years. Also, focusing on the dangers of distracted driving is a must with newcomers to the road. You may not get a second chance. Texting while driving is one of the leading causes of accidents among young drivers. And unfortunately, older drivers are also often guilty of texting while driving.
From the time of getting the permit until after the test is taken, as a parent you can help develop safe driving skills that allow teens to adapt to many unpredictable conditions. As previously mentioned, many insurance carriers will reward you with discounts or reduced premiums in the future, for every period of safe driving. This is especially important for all persons under age 21. Accumulated tickets and at-fault accidents can easily increase premiums by thousands of dollars.
Adding Children To Your Policy
When your child finally purchases their own policy, their safe driving record will help them keep premiums low. One way to reinforce the importance of safe driving is to make the teen responsible for a portion of the car insurance payment, and perhaps the maintenance and gas too. That may reduce the number of hours they are on the road and also expedite their search for a part-time job. Increased responsibility often equates to better driving.
Regarding adding them to your policy, often, you are not charged until they actually have their permanent license, instead of the temporary permit. However, once they pass their exam, typically you should add them within a specific number of days. Although not often specified in the policy, adding them within 7-10 days is advised, unless you are advised differently by your agent or broker. Occasionally, up to 30 days may be allowed. However, if an accident occurs, the effective date of the additional driver may have to be backdated to the original license date.
While adding coverage for your teen will certainly result in higher premiums, spending time to do the research and investigating options, as well as encouraging safe driving, can be beneficial for you in the short and the long term. Brokers and reputable websites (like ours) specialize in finding the companies that will help you lower the cost of insuring your young son or daughter on your policy. But of course, there’s no substitute for driving accident-free and getting good grades. That always helps your rate!