According to the Center for Disease Control young drivers present a significantly higher than average risk of getting in a crash [1]. There is, of course, a distinction to be made between teen motorists and those in their younger 20s, but the point stands.
Because of this added risk insurance companies tend to charge more and finding cheap insurance for young drivers is a challenge.
- Insuring someone for the first time can be an expensive and nerve wracking process which is why we created this guide. In this article, we lay out the best auto insurance options for teenage drivers. We’ll also cover an Overview of Insurance For Young Drivers
- How to Decide if a New Driver Be Added to An Existing Policy
- Five Simple Tips for Getting Cheaper Auto Insurance For Young Drivers
An Overview of Insurance For Young Drivers
Should a New Driver Be Added to An Existing Policy?
Five Simple Tips for Getting Cheaper Auto Insurance For Young Drivers
Let’s get started…
Table of Contents
An Overview of Insurance For Young Drivers
To get the best deal on a policy for your son or daughter (or for yourself) there are some basics things you need to know. Here’s a brief primer.
The cost of adding a new driver to your insurance plan is notoriously expensive, so much so in fact that Forbes and NBC news have both dedicated posts to discussing it [2] [3]. Coverage for an inexperienced motorist is generally more costly than that of their older counterparts. Unfortunately, not much can be done to change this, but you may have more influence over a few factors.
The price you ultimately pay for insurance depends heavily on where you live. Research (also from the Forbes article) notes that premiums go up in New Hampshire an average of 111% when a young driver is added whereas in Hawaii this number is only 17%.
There are a number of things people can do to keep costs down, however. Below we’ll list some tips that directly affect premiums but other things to be done are:
- Shop around diligently — the difference in rate between carriers can be quite substantial.
- Look for additional discounts offered such as discounts for students with a high academic grade average
Should a New Driver Be Added to An Existing Policy?
In the quest for affordable insurance one of the most common questions, a young driver will face is should they stay on a family policy or purchase their own?
There are pros and cons to both of these scenarios.
Pros:
Joining a parent’s existing policy, for example, will generally spell lower rates. Parents tend to have an established credit history, more than one car, and/or own a home, which lowers their risk in the eyes of an insurance carrier — hence lower rates.
Cons:
Perhaps a parent has a terrible credit score or driving record. In this case, it might make sense for someone to strike out on their own. Also, depending on the relationship between the parent and the driver an auto policy may be a source of friction in the relationship.
Five Simple Tips for Getting Cheaper Auto Insurance For Young Drivers
Regardless of whether you’re a parent footing the bill for your child or a person buying your first policy, you’ll want to do whatever you can to save some money.
Here are five things you can do to help avoid breaking the bank.
- Check into good student discounts. Many of the big carriers such as State Farm, All State or Nationwide offer reduced rates to people who maintain a B average or higher.
- Avoid custom work on your car and/or install anti-theft devices. Taking these type of steps is viewed favorably in the eyes of an insurance company, discounts may vary depending on the vehicle type and state.
- Take a defensive driving course. This is a great practice for general safety, but it also can have a significant impact on your rates. Drivers who take one of these courses are less likely to have an accident and more likely to take safe driving seriously.
- Choose the right car. If you want to keep your premiums under control choose a safe or older vehicle, not a flashy new Audi. Older vehicles, for example, may only need liability coverage (no collision) and this can be a big savings in and of itself.
- Pick the right coverage. If an inexperienced motorist gets in an accident their premiums are likely to spike as a result. That is of course unless you purchase accident forgiveness. For a small additional fee, you can guarantee that a fender bender won’t send your rates through the roof.
Summary
Young drivers present a unique risk both on the roadway and (potentially) to their parent’s pocketbook. But by understanding the dynamics of insurance and taking a few steps you can make sure that a youthful driver is covered and can keep costs manageable.
Let’s do a quick review of the most critical points you’ll want to keep in mind:
- Auto insurance for the young can be quite expensive, but a lot of this depends on where you live. Making a youth partially financially responsible for their premium is a great strategy for safety/cost.
- In most cases, the best option is to add a new driver to an existing policy but this course is not without its problems and pitfalls (parent has a bad record, disagreements, etc).
- To lower the cost of premiums for a young motorist make sure to: take a defensive driving course, pick a reasonable car, purchase accident forgiveness, check into good student discounts, and install anti-theft devices in the vehicle.
Sources:
Want to know How Much Your Injury Claim is Worth? Get a free settlement estimate right now.
