Your kid getting their own license is a huge deal. Not just for them, but for you too! You can finally hang up your Uber-driver hat and spend your evenings in your home instead of in the carpool lane.
But like most adult-ing, this new freedom comes at a cost. In fact, it can come at a premium.
A recent study by Coverage.com revealed that the average rate increase for adding a teen driver to a policy is … wait for it … 130%!
The study also showed that adding a male teen driver sometimes has a larger rate impact than a female teen, and that the overall impact varies from state to state. But still. 130%? Now more than ever, we’re gripping our dollars close to our chests. And rightfully so! No one likes paying insurance premiums, but we also know they’re worth the investment.
Here are four, practical ways you can save money on teen driver insurance:
Teen Driver Discounts
Does your student have a 3.0 GPA or higher? They may be eligible for a discount.
Has your student taken a defensive driving course? Almost all carriers offer premium-reductions for any driver who has taken a credentialed course. Available online, a defensive driving course could save your teen driver up to 10%.
If your teen isn’t an avid driver, make sure you tell your agent. If they don’t drive for long periods of time (say, during a college semester), they may be eligible for a lower premium.
Weigh the Options
While it’s less expensive to add your teen to your policy, you also add a ton of liability exposure. If you titled the vehicle in your teen’s name, you could look at purchasing a separate (more expensive) policy, but you may not be liable if they’re in an accident.
Truthfully, once your teen turns 18, taking an Uber might be safer and cheaper. Insurance + depreciation + gas + maintenance might be close to $1,000 per month for a teen. That’s a lot of Uber rides!
Raise Your Deductible
Let’s say you currently have a deductible of $500—meaning, if you get into an accident, you only pay $500 for repairs and insurance covers the rest. If you raise your deductible to $1000, you will save a little on your monthly premium.
The trade-off would be a deal you make with your teen. If they cause an accident, they’re responsible for any costs above the previous deductible.
Make the Right Car Selection
Your teenager may have had a sports car picked out for years, but that doesn’t mean you need to buy it. If you’re taking out a loan to buy your teen a car, you almost always require additional coverage. Buying a safe, older vehicle in good working condition can save you moneyif it doesn’t require collision or comprehensive coverage.
Your teen can also save money if they own their car by bundling their insurance with yours and receiving a multi-vehicle discount, if available.
Don’t let the stress of pricing out options steal this milestone’s thunder. Reach out today and let us find a way to get you the best coverage at the lowest rates.