Your teen’s first time behind the wheel can be stressful for a number of reasons: it’s a sign they’re growing up, they have more freedom (and are more apt to get into trouble), and there’s a higher chance they could get into a crash.
But your child’s first driving experience is sure to cause stress in another way you may not have thought about: increased car insurance rates. Adding a teen to your insurance policy will almost always raise your premium, sometimes drastically.
While this spike in your insurance might seem unfair, insurers’ reasoning for increasing rates comes down to statistics. Studies show teens are far more likely to be in a crash than any other age group.
According to the Centers for Disease Control and Prevention (CDC), car crashes are the leading cause of death for teens in the US. This is mainly because they lack experience.
The CDC notes because they have less practice, teens are more likely to make serious mistakes that lead to a crash. They are also more likely to engage in risky driving behaviors like speeding and not wearing a seat belt.
In fact, the CDC reports that 16-year-olds are three times as likely to get into an accident than 17-year-olds and five times as likely to get into a crash as 18-year-olds. Couple this with the possibility of teens drinking and driving, or driving while distracted, and you can see why insurers see covering teens as a liability.
And while teenagers are not the only ones guilty of distracted driving—whether that’s texting, using a mobile app, or eating–a large percentage of distracted drivers are young people.
Case in point, a study by Liberty Mutual Insurance and Students Against Drunk Driving found 68 percent of teens admitted to using an app while driving. And distraction.gov cites 27 percent of all distracted drivers are in their twenties.
How much can you expect your insurance bill to increase? One report notes adding a 16-year-old to your policy could spike your rates as much as 92 percent. But don’t fret too much! There are still ways to save, even when you’re adding a teen to your policy.
Here are a few tips to try:
Insurance companies don’t use a universal formula to calculate your premium. Rather, each company decides individually how much to increase your rates based on factors like your driving history, age, and location.
This is why shopping around can produce radically different rates. It can potentially save you hundreds of dollars a year, even if you have a teen on your policy.
Did you know insurance companies offer discounts for good grades? Called the good student discount, some insurers will reward high school and college drivers who receive high marks in school.
Generally, you need to have a grade point average of a 3.0 or above to get this discount. It doesn’t hurt that studies have shown good students file less car insurance claims.
If you don’t want your premium to increase even more, make sure to educate your teen on proper driving techniques. By teaching them how to drive safely, you’ll prevent them from getting a speeding ticket or causing a wreck.
This will help maintain their rates at the very least. And as they get older, teens should see their premiums go down considerably.
When teens go to college, they often leave their cars at home. Since they’ll be on the road less, they have a smaller chance of being in an accident. It’s worth letting your insurer know this, as some companies give lower rates if a student isn’t using their vehicle as much.
If your son or daughter takes a driver’s education class that meets your insurer’s requirements, they could be eligible for a discount on their premium for as much as 10 to 15 percent. This can include classroom instruction, but most insurers require a certain amount of driving time under the supervision of a licensed adult.
Some insurers have come out with telematics devices and apps to reward good drivers (including teens) with a discount on their premium.
These devices are plugged into your car and track driving behaviors such as:
A few companies have even come out with telematics programs rewarding teens specifically for safe driving . Other apps like TrueMotion can specifically monitor distracted driving. This app not only shows where someone is driving, but looks at whether a person is speeding, texting, or tailgating.
This was a guest post by Kayla Norman, who is a writer for QuoteWizard, where she writes car, homeowners, and health insurance blogs daily. Her work has been featured on Health.com, Rodale Wellness, and Seattle Refined.
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