The Sticker Shock of Insuring a Teenaged Driver

Why the astronomical cost of insuring a teenage driver? There’s a simple answer and it’s because drivers aged 16 to 24 get into a lot of accidents in which they are found at-fault. To the insurance company, this badge of honor means teenagers make up the highest risk group of drivers. High insurance rates help insurers limit their exposure to this age group.

What choices do you have?

If you need to insure a driver between the ages of 16 and 24 you can either add that driver onto you auto insurance policy or you can purchase a separate policy. Adding to your policy is a good idea if you are or will be eligible for discounts such as safe-driver and multiple-car discounts. Even with the discounts though, it’ll still cost a lot.

If you already insure an expensive car, consider getting the teenager a less expensive auto and a separate auto insurance policy. Because the cost of repairing less-expensive models is lower, you might find the cost of comprehensive and collision coverage more affordable. Again, lower cost repairs reduce the insurer’s risk and that usually translates into lower rates on coverage.

Where to turn for help

A good place to find assistance is at your current auto insurance company. Explain the situation to the agent and together you can probably figure out the least-expensive option. Your quote will be more accurate if you can provide the details (make, model, year) of the car you intend to purchase (or are considering purchasing) for your teenager. With this information in hand, don’t forget to request quotes from other auto insurance companies so you can see what they have to offer. Have the other companies quote both ways: adding the teenager onto your policy and getting a separate policy for the teenager.

Your teen may have already taken a Driver’s Education course and that’s good. However taking another Driver Improvement Course may entitle the teen to an auto insurance discount. But if it doesn’t, your teen will have earned even more valuable driving skills, and that’s a good thing.

One final word

Although it takes time and effort to talk your situation over with multiple auto insurance companies, it’ll be worth it if you end up saving money on your policy; money that you can then put towards the teenager’s college fund!