|Question: How can I reduce the expense of insuring a teenage driver?|
According to insurance company statistics, 16- to 24-year-olds (particularly males) are the riskiest drivers on the road; they are responsible for more accidents than any other age group. The claims resulting from these accidents cost insurance companies a lot of money in settlements. To minimize their own risk, insurance companies pass their costs on to you by charging higher rates for these drivers than for any other age group. As a result, you'll want to look for ways to save on your insurance costs.
Unless your insurance company insists otherwise, you may be able to delay insuring your teenage driver until he or she gets a driver's license. A learner's permit restricts a teen to driving only when a licensed adult is in the car. Consequently, many insurance companies consider teens with learner's permits as low-risk drivers and require little if any additional premium to cover them. Learner's permits are good for 60 to 180 days, so if you're not required to insure a teen with one, you can save two to six months' worth of premium expenses.
Once your teen has a driver's license, adding him or her to your policy will most often be your least expensive option. You may have discounts on your policy (e.g., multiple-car and safe-driver discounts) that reduce your rates; these discounts might not be available to your teen. Do, however, ask your insurance agent if your teen qualifies for any discounts on his or her own. For instance, some insurance companies honor driver-education and good-student discounts.
But if you drive a vehicle that's particularly costly to insure, it may be better to buy your teen an inexpensive car and insure him or her separately. If the car you buy for your teen isn't worth a lot to begin with, you may be able to waive the collision and other-than-collision (also known as comprehensive) coverage and save money on the premium. Ask your insurance agent to help you compare the numbers to see which route might be the best one to take.