The Secrets of How to Save Money on Car Insurance for Teenagers

Car insurance policies for teenagers, including many high school and college students, are usually costly because these novice drivers lack any prior driving background.

Studies suggest that less-experienced young drivers are more likely to be involved in car accidents and incur fines such as speeding tickets because of their reckless driving, distractions, and inexperience behind the wheels.

This article will tell you why teenagers pay such hefty car insurance premiums. Is it really worth it? And, more importantly, strategies on how you can save money on the policy.

Why do Teenagers Need Car Insurance Anyway?

We know that insurance companies charge enormous amounts for an insurance policy for teenagers, but is it even worth considering it?

• Based on statements from the California Department of Motor Vehicles, teenagers are twice as likely to get citations as any other group.
• Statistics suggest that teens are more likely to get into an accident than anyone else. They are involved in more accidents per mile driven than drivers aged 20 to 79. The number of accidents involving 16 to 19-year-old drivers is three times higher than seasoned drivers.
• The Insurance Institute for Highway Safety states the younger a driver is, the more likely they will get into a car crash.
• Even though it is unlawful to consume alcohol under the age of 21, let alone before driving, teen drivers are responsible for more alcohol-related crashes than any other age group.

My intent is not to terrify you with numbers and data; instead, I want to give you a sense of why the policies are so expensive and whether you should consider investing in them.

We can infer that the insurance companies are not unreasonable for charging such heavy premiums based on the above data. If anything, the data solidify that it is necessary to have an insurance policy for your young driver.

How Elevated is Car Insurance Rates For Teenagers?

We already know that teenagers pay expensive car insurance premiums, and we also have the reason behind it — higher tickets and accident rates. But how much higher is the premium?

On average, even if teenagers are added to the parent’s policy, the premium goes up to 50 to 100% based on the family’s circumstances.

Some companies may provide discounts in exchange for good grades or participation in a telematics program. Others may charge teen drivers more until they turn into seasoned drivers and can demonstrate that they are safe behind the wheel.

The driver gets enough experience to minimize tickets and accidents with time. The National Safety Council states that inexperience is the primary cause of accidents among teenagers. Being rookie drivers, they struggle to do mundane things that seasoned drivers do every day.

Interestingly, as the driver gets older, the insurance rate drops dramatically, on an average of 12%, until they hit 25. Hence, if a teen driver is 18 years old today, the premium will cost approximately $208 per month. However, seven years down the road, the expense goes down to just $136, and it keeps going down till the driver hits 75.

How To Get Discounts On Car Insurance For Teenagers?

Now you must be wondering, “Is there no way in which I can buy car insurance for a teenager without burning a hole in my pocket?” Fortunately, there is! Whether you are a teen, a parent, or a guardian paying the bill, follow these steps to save your money on premiums.

While neither of the tips will ultimately compensate for the higher premiums, they will assist you cut down the cost substantially.

There are two ways to buy a car insurance policy for a teenager. First is a separate policy that covers the teen driver solely. The second and more recommended option is including the teenager in the parent’s policy. According to Forbes, teen drivers and their families can save $3,053 per year by purchasing coverage under a single policy.

However, the best discount on the premium is available through the good student discount. Here are the criteria to avail of this discount:

To begin with, the student must be under the age of 25 and enrolled full-time in a high school, college, or university. In addition, their grade point average must be 3.0 or above. In other words, it must be no less than a “B.”

• A standardized test result may be used if the student is learning in a non-traditional environment, such as a homeschool.
• You must inform the insurance company if the student is attending a school more than 100 miles away. Suppose they aren’t driving themselves to university. In that case, you’ll undoubtedly get a discount because they’ll have far less access to the car.

There are also other safety courses available for teens to enroll in. Similar to a defensive driving course for adults, these classes go beyond the fundamental driver’s education and offer extra coping skills.

Another exciting way, which is not yet widespread, is to install a monitor in the car while the teen drives. This allows the insurance company to collect data and ensure that the young driver adheres to safety guidelines.

In turn, they offer you a heavy discount on the premium and also develop your teen into a responsible driver.

Final Words

There’s no denying that car insurance for teenagers is expensive for all the reasons above. However, not having a policy will cost you much more financial trouble.

Hence, it would be best to buy a policy that covers the teen driver. Additionally, follow the discount steps to minimize your expense and maximize safety.

I hope you found these suggestions valuable. Do let us know if you have any further questions. Until then, drive safely!