May 1 2008

Teenage Drivers Equals High Insurance Premiums: What To Do Now!

Posted by bpaul in Moolah Ramblings
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If you have a teenage son or daughter and there going to get their drivers license in the near future, just be prepared for your car insurance premiums to go significantly high. Once you child gets their drivers license it’s basically inevitable to prevent them from driving. You do not want to be that bad parent, and tell them that they can’t drive your car when they just got their license. Even though your premiums will probably increase by almost double here are five tips for parents that will help them curb the high cost of car insurance when your children gets their license.

You can not get too mad with the insurance companies because the recent statistics on teenage drivers are not too good. According to the Insurance Institute for Highway Safety (IIHS), teenagers between the age of 16-18 get into accidents almost six times more often than drivers between the age of 30 and 59. No wonder car insurance premiums are so high for this age group.

However, do not despair because even though you probably can not avoid the financial shock of high premiums, many car insurance companies offer discounts for special criteria that you child meets. Here are seven tips to help lower car insurance premiums and keep your teenager’s license free of violations:

1. Keep it all in the family. Generally it is best to add your child to your current auto insurance policy as an additional driver, rather than purchase them an independent policy. By doing this all rebates and discounts applied to your policies will be pass down to them. One exception, if you currently own a sport or luxury automobile you are better off buying your teenage son a hoopty, and putting him on a separate policy.

2. Getting good grades is a real plus. Typically the policy with most car insurance companies is if your teenager maintains a B or better school average they are eligible for discounts. Depending on the company some discounts can go up to 25% of the premiums.

3. Enroll them in driver education courses. Hopefully this was done prior to your teenager getting their license. Insurance discounts are available for teens who take state approved driving classes. Call your car insurance company to find out which schools are covered in your state to receive the discount.

4. Raise the deductible. Increasing your deductible amount will automatically decrease your premiums. For example, when I raised my deductible from $500 to $1000 my premiums decreased by $40 per month.

5. Take a Defensive driving class. If and when your teenager gets a traffic ticket, make sure you encourage them to take the defensive driving class that is usually offered by the judge if its their first offense. Points on their license will not be deducted, and they will learn many driving safety tips from the all day class.

6. Steer clear of luxury and sports cars. Do not try to live vicariously through your teenager by giving them the latest sports or luxury car on the market. Getting your teenager a dependable car to drive, with the latest safety equipment, will lower your premiums. Not only will you save money on car insurance, but fast driving will be less of a temptation. Bottom line you kids only need to get from place A to B…