How to Save on Your Teenager's Insurance Costs

Whilst our young are growing up, we tend to be a bit overprotective of them, knowing how wrong the world has become and the perils out there at every bend. We also try to instil compassion, and the realities of the dangers all around us on the roads, and impart on them to keep their surroundings in mind at all times while driving. Sometimes letting go is the hardest thing a parent can do, and one of the things that starts this progression of teenager to adult is the aquisition of a drivers license, and all of what that entails. If the teenager is working, and buys their own vehicle, we can still help them to save money on insurance, and impart our wisdom on them, whether they want it or not.

Cheap ways to insure your teenage driver include putting their car in your name, asuming that you have a good driving record, and insuring the car as a second vehicle for yourself. You can then insure your teenager as a second driver on your second vehicle (which is really your teenager's car), and the yearly insurance costs for your teenager will be a fraction of what they would have been would they have insured themselves on their own car.

To further reduce your teenager's insurance costs, you can have them take a State or Provincially accredited driver's eduction and training course. Passing these courses can reduce your teenager's insurance costs by as much as 20 percent or more, depending upon the vehicle that they own, the insurance company, and where you live. As a second driver under your second car, and with the training course behind them, insurance costs for teenagers can be brought down to an almost liveable premium.

Insurance companies look at a first-time driver, especially teenagers, as a high risk for them to have to pay an insurance settlement for. But the insurance companies will make concessions for teenagers that appear to be trying to be consciencious and law abiding drivers who follow the laws and regulations of the road. Insurance companies make their money from charging insurance fees and hoping that the insured will never have to make a claim. Or, if they do make a claim, that the claim, minus the deductible, will be much less than the insured has paid into their policy. And, of course, once a claim or two has been submitted, the insurance policy premiums could skyrocket for teenagers.

When teenaged drivers are in high-risk categories, as in those who have had accidents or tickets, or both, their insurance costs could be extremely high, even well over $500 per month in many States and Provinces where no-fault insurance is not offered. The costs of insurance could be extremely expensive when the teenager has been in at least one at-fault accident, and/or been ticketed for speeding, or other driving infractions. Instilling the need to follow the speed limits, drive safely and courteously, and stay far enough behind traffic to be able to avoid accidents will help your teenager to avoid the causes of insurance premium increases.

However, with a clean driving record, and some comparison shopping for insurance rates as a second driver on your winter, or second car, your teenager should be able to find some affordable insurance. As long as they are willing to forgo collision, fire and theft insurance, and take a very high deductible amount against the value of their car, there are major savings to be made, with some investigative insurance hunting. A deductible amount is that amount which is deducted from any insurance claims made against your insurance provider. The nominal amount for deductibles is $500, but with higher deductibles, the premiums will drop.

When dealing with insurance companies (or agents), you can reduce the overall cost of insuring your teenager by opting out of coverage for things that would not garner an insurance payment anyways. With a car that is at least 6 to 8 years old, and a high deductible on your policy, the insurance company would either pay very little, or not pay anything if the car was totalled, as it would have been worth about what, or even less than the deductible amount.

Another avenue to look into to reduce your teenager's insurance costs would be to buy an older, but very well maintained vehicle, and staying away from "muscle" cars, V8s and larger pickups and vans. The cheaper and safer the car, the cheaper the insurance, as long as your teenager remains ticket free, and follows all of the laws and requirements for probationary drivers.

Just getting caught with an uninsured or underaged passenger with no active drivers license while driving on probationary terms could lead to extremely high insurance fees, court costs, as well as the loss of the teenager's drivers license, and any benefits from taking driver safety courses. So make sure that your teenager knows full well that they can not drive unless they have a mature, licensed driver with them while they are still on mandatory probationary driving terms. Otherwise, their insurance fees may skyrocket.

Of course, most insurance companies will offer a slight reduction for every year that your teenager goes without a ticket and remains accident-free. When two or three years of a perfect driving record have passed, you should shop your combined insurance policy (your vehicle as well as your teenager's) around. Other insurance
companies will automatically offer a ten percent reduction in insurance premiums, and possibly more for the clean record and driver's safety course that your teenager has.

Shopping around and showing insurance companies the lower quotes that you got from other insurance providers can and usually does start a bidding war between the different insurance companies.

Drive safe. Drive informed.