What Are the Best Car Insurance Plans for Teens?

Watching your teenager drive off in a car can be a painful experience. It's an uncomfortable mixture of the pain of letting go and the fear of what can happen on the road. You can ease this discomfort, however, if you learn as much as you can about car insurance plans for teens.

Personal Versus Joint Policy

Examined from a purely financial perspective, the best car insurance plans for teens are generally those added to their parents' policies. Parents typically have better credit scores and may have a good driving record, and therefore qualify for discounts that a teenager is unlikely to receive on his or her own.

Barron Insurance Group points out, however, that when teenagers make mistakes and are listed on their parents' policies, those mistakes can impact the entire family's insurance rates. If the child gets into an at-fault accident, for example, the insurance company will consider the entire policy (and everyone on it) rather than just the teenager.

Older Cars and Teen Insurance Coverage

One of the ways to keep costs down on car insurance plans for teens is to purchase only liability coverage. Many teenagers are given or purchase older vehicles that have decreased significantly in value. In this case, you will probably pay more for comprehensive and collision coverage than the car is worth.

Talk with your insurance agent about the cost differences between different coverage levels. Liability insurance is important (and required by law), but other types of coverage are completely optional.

Pursuing Insurance Discounts

You can save a lot of money on car insurance plans for teens by pursuing every available discount. Insurance companies often reduce rates for teenagers who have taken driving school rather than learning from their parents. They might also offer discounts for good grades, vehicles with high safety ratings, and other factors.

Limiting Mileage

Most teenagers only need to drive to school, work, and the occasional social gathering. If you impose rules on the number of miles your child can drive, insurance rates may decrease considerably. Talk to your insurance agent about restricting miles on teenage drivers and see whether your rates go down.

Choosing a Deductible

Higher deductibles mean lower rates on car insurance plans for teens. This also means, however, that you will pay more for any damage incurred. Consider your family finances when choosing deductible levels. If you can afford to repair damages out of pocket, a higher deductible will lower your monthly rates and keep your teen on the road.

Grouping Policies

If your teen intends to purchase his or her own car insurance plan, consider having him or her buy from the same agent or company. Group discounts often apply when family members purchase multiple policies from the same firm. Just because you have separate contracts doesn't mean you can't lower those high teen rates.