If you have or had a teen driver in your household you know that car insurance is not cheap for a youthful driver. If you have not had a teen driver yet, I am in this category, this is your warning to start preparing because getting a teen licensed can lead to many insurance questions. Below are the top 3 questions we get in our insurance agency about car insurance and teens.
When Do I Need to Get Car Insurance for My Teen?
The simple answer is to check with your insurance agent. Each car insurance company has different requirements for adding new drivers. Some require that new drivers are added to a car insurance policy when they first get their permit and others wait until they are licensed.
Should My Teen Have Their Own Car Insurance Policy?
From a risk perspective, teen drivers should have their own car insurance policy. A separate policy for a teen is more likely to keep a teen’s accidents or violations from affecting the parent’s policy. This helps to protect mom and dad’s car insurance price from going up or being cancelled/non-renewed because of a teen driver. Note that for a teen driver to have a separate policy, most car insurance companies require that the teen’s car is solely titled or co-titled in the teen’s name. Also remember that car insurance follows the car. So if a teen gets into an accident while driving the parent’s car, the accident would be on the parent’s policy, not the teen’s.
From a price perspective it is usually cheaper to put a new teen driver on the parent’s car insurance policy. The parents normally qualify for more discounts and have a better insurance score that leads to lower insurance prices. Regardless, have an insurance agent quote a teen driver on their own policy and on the parent’s policy. The price difference may be small and worth separating the risk.
How Can I Keep the Price Low?
Stay Accident and Violation Free – Accidents and violations are the quickest way for a car insurance policy to skyrocket in price. One way to help prevent accidents and violations is communicating about driving tips and setting driving guidelines. Go to Pennsylvania Department of Transportation to share driver safety tips with your teen and learn how parents can effectively teach a teen to drive.
Shop Around – According to the PA Insurance Dept “A good rule of thumb is to get quotes from at least 3 different insurance companies”. Different car insurance carriers rate teen drivers differently and shopping a few different car insurance companies helps ensure the best car insurance solution for your family’s situation. Remember that the lowest price is not always the best solution and make sure to compare “apples to apples” when getting quotes.
Good Grades Matter – Most car insurance companies offer good grade discounts of 5-10% for students with a GPA of 3.0 or higher. Edmunds.com suggests finding out how much you can save if your teenager gets the discount and giving all or a portion of that money back to your teen. This not only provides a reward for academic performance but it motivates the teen to continue to get good grades.
Driver Training Pays – Most car insurance companies offer a driver training discount if a young driver completes a combination of classroom instruction and behind the wheel training from an accredited driver training course. Click here to find a driver training school near Lancaster, PA.
Don’t Finance a Car – Normally the biggest cost for a teen’s car insurance policy is the comprehensive and collision coverage, which covers damage to their car. Financed cars are required to carry both comprehensive and collision coverage because the financing organization wants to ensure that they get their money back if the car is damaged or totaled. The best advice is to buy a used and reliable car with safety features (airbags, ABS brakes, keyless entry) that does not require financing. That way you can choose to add comprehensive or collision coverage and keep the car insurance price reasonable.
If you have any other teen related car insurance questions, please leave them in the comment box below.