Driving may be a rite of passage for teenagers, but for parents like myself, having a teenage driver can be stressful and expensive. Your child will need auto insurance coverage as soon as they receive their driver’s license.
Finding the right insurance may be difficult, but doing so can save you money while keeping your teen covered. Here are some important considerations:
Determine Whether to Add Your Child to Your Policy or to Buy a Separate Policy
Check with your insurer to see how your premiums will be affected. Expect premiums to rise dramatically, but savings may be found through multiple-car and good-student discounts.
If your child is driving an “old beater” that doesn’t require comprehensive or collision coverage, a separate policy, in limited instances, may save you money. Also, keep in mind that the type of car, the number of doors, and even the color may affect the premium you have to pay.
Discuss your options with your insurance agent, and be sure to shop around.
Consider Your Coverage Choices
Most personal auto policies won’t cover a driver transporting goods or services in exchange for a wage. So if your teen is planning on becoming a pizza delivery driver, contact your insurance agent to determine if additional coverage is needed. Also, check with the employer and see if they offer coverage at a lower cost.
Find Ways to Save Money
Consider vehicles with high safety ratings over sportier, more expensive cars, or think about raising your policy’s deductibles. For example, a two-door roadster is going to cost more to insure than a four-door sedan. A car’s make and model also have an effect because each one brings with it different repair costs.
Also, check for good-student discounts, military discounts, or any other factor that can help lower the monthly premium. Savings also could come in the form of a common car, as repairs will likely be less than that of something more uncommon.
Reassess Your Need for Collision or Comprehensive Coverage
Ask about “occasional” or “pleasure-only” discounts, which may apply to children away at school. Being away at school can help alleviate some of the costs associated with insuring a car.
Other Things to Consider
- Explore usage-based insurance, which involves installing a device in the vehicle that monitors driving behavior and rewards good driving. It’s also a way to keep tabs on your teen’s driving.
- Have your teen complete a driver’s education course. Many states require this to obtain a license. Either way, see if a course will lead to a premium discount.
Insurance may be expensive, but it is necessary if your child is going to be driving. There are many ways you can find discounts—it just takes time to ask about and find them. Other items to consider are having your child as a secondary person on a car and avoid purchasing a new car altogether. Find what works best for you, and go from there.
