Insuring your teen driver

Reduce stress of new family driver by understanding your car policy

For parents, the excitement of having a first-time driver in the house is usually tempered with worry. With little driving experience, immature drivers are at a higher risk for accidents.

Of course, safety concern is uppermost in most parents’ minds but other stressors—like the high cost of insuring your new driver and the financial liability implications of a teen driving mishap—can be reduced with these steps.

Get teens involved

Before getting a learners’ permit, make a call to your insurance professional. Your agent or rep can clearly explain the costs involved in insuring a teenage driver. The good news is, as your teenager gets older, insurance rates will drop—providing he or she has a good driving record. Therefore, it is important to involve your teen in the car insurance discussion.

From the outset, it’s important to talk to teens about the relationship between driving a car and the attendant responsibilities, including insurance costs. Explain and reinforce driving safety tips and the serious consequences of driving infractions or accidents, including increasing the cost of insurance.

Encourage positive behaviors

Auto insurers will often offer discounts or reduced premiums to:

• Students who maintain at least a “B” average in school
• Teens who take a recognized driver training course
• College students who attend school at least 100 miles away from home and don’t bring their car to campus

Choose a policy

It’s generally less expensive for parents to add teenagers to their auto insurance policy than it is for teens to purchase one on their own. By insuring your teenager’s car with your insurer, you may also qualify for a multi-vehicle discount. Insurance companies differ in how they price policies for young drivers, so do some research into prices to be sure to find the best fit for you and your teen.

Assign the right car

Find out how your insurer assigns drivers to cars—some insurers will assign the driver who is the most expensive to insure (generally the teenager) to the car that is the most expensive to insure. If possible, assign your teen to the least valuable car.

Note that with this kind of arrangement there can be no exceptions; your teen must use only the car to which he or she is assigned, even in an emergency. If your teenager is involved in an accident with an unassigned car, penalties could be imposed and your own premiums might increase.

Raise deductible to save

The higher your deductible, the more money you can save on your premium, so consider raising your deductible from the minimum amount required. You may want to use those savings to increase your liability insurance.

Article courtesy of Insurance Information Institute. For more information about auto insurance, visit http://www.iii.org.