As a parent, one of the biggest concerns when your teen gets their driver’s license is not just their safety on the road but also the hefty insurance premiums that come with insuring an inexperienced driver. While teenagers are excited about the freedom driving offers, the cost of insurance can quickly become overwhelming for many families.
Fortunately, there are several ways to reduce the cost of car insurance while ensuring your teen driver is properly covered. Here are five effective strategies to help save on insurance premiums for teenage drivers:
1. Skip Optional Physical Damage Coverage
If your teen is driving an older car, it might not make sense to purchase collision coverage. The rule of thumb here is simple: if the cost to repair or replace the vehicle is less than your collision coverage, it’s not worth paying for it. Collision coverage can be expensive, especially for teen drivers, and if the car’s value is low, you could save money by eliminating this optional coverage. This can lead to significant savings on your insurance premium.
2. Increase the Deductible
One of the easiest ways to lower your insurance premium is by increasing your deductible. Raising it from $500 to $1,000 can save you hundreds of dollars annually. While this means you’ll pay more out of pocket in the event of a claim, the savings on your premiums can be well worth it in the long run. It’s a smart decision for parents looking to reduce the cost of insuring their teenage driver.
3. Use a Monitoring Device
Many insurance companies, like Safeco and Progressive, offer devices that monitor your teen’s driving habits. These devices track behaviors such as speed, braking, and acceleration, and offer discounts based on safe driving. Not only can this save you money on your insurance, but it also gives parents the ability to monitor their teen’s driving and ensure they’re following safe practices on the road. If a child’s driving is reckless, the device can alert you to intervene before an accident happens.
4. Encourage Your Teen to Get Their License Early
It might seem tempting to have your teen delay getting their license, but this can actually make their insurance more expensive. In states like Massachusetts, a teen who has been licensed for several years will start to see discounts as they gain more driving experience. The sooner your teen is licensed, the sooner they’ll be eligible for discounts, typically starting at around age 19, with full discounts at age 22. By encouraging them to get their license at the earliest legal age, you can help them save money as they get older.
5. List Your Teen on Your Policy
Once your teenager is licensed, make sure they’re added to your auto insurance policy. Many insurance companies require that all licensed drivers in a household be listed on the policy. Even if your teen only drives occasionally, it’s important to include them as an occasional driver on your policy. This ensures that they’re covered when driving your vehicle and helps prevent potential issues with claims in the future.
By following these simple steps, you can make sure that your teen is adequately insured while saving money on premiums. It’s all about making informed choices and taking steps to reduce risks, which will ultimately lower the cost of insurance for both you and your teen.
