Wednesday, 18 April 2012

Low Car Insurance for Young Drivers

Teens are notorious for getting into fender benders.  From small dents and dings to full fledged accidents, a teen driver’s rate of auto accidents is three times higher than for someone in their early 20’s.  This, of course, causes insurance rates to skyrocket across the board, affecting even the best young driver.

While you probably won’t be able to find cut-rate insurance for your teen, you should be able to negotiate a better deal if you are willing to make a few policy adjustments and sacrifices.

First, it is important to understand why your teen drivers insurance costs are so much higher than your own.  Not only do young drivers have a much higher accident rate (with boys under the age of 25 being involved in many more accidents than even their female counterparts), but also because of their lack of experience.  Car insurance rates have the tendency to be lowered after a period of responsibility which results in no accidents over a period of time.  Since younger drivers have not had the ability establish a good track record with their insurance carrier, they will almost always be considered high risk for the first few years that they are behind the wheel.

Secondly, it is vital to understand what you can do to help lower those high young driver rates.  Not all of the options listed below will be popular with your teen, but they will help to keep some money in your wallet:

  • Limit your young driver’s time behind the wheel:  by listing your young driver as an occasional river instead of a primary one on your insurance policy, you should be able to pay a bit less in premiums. Of course this means that he/she will not be able to drive as much as they may like.  Occasional drivers normally clock less than 10,000 miles per year.  Of course, the less your teenager drivers, the less chance they have of being involved in an accident, which will also help keep your rates lower.
  • Buy your teen a clunker.  This serves several purposes. First, an older sedan type vehicle is cheaper to insure compared to a sportier model or SUV. Why? Because they are cheaper to fix when banged up.  Secondly, if you give your teen an old clunker to drive you probably won’t have a need for expensive collision insurance since the premium will likely cost more than to replace the car in the event of a serious accident.
  • Require the completion of a driver’s safety course for your teen.  Passing any type of safe driving course can help to lower young driver rates by as much as 20%. This can be a driver’s education course offered at their school or a private safety course found in the community.
  • Require at least a B-average in school.  The better your student driver’s grades, the deeper discount you can enjoy on their auto insurance. Most carriers now acknowledge that good students tend to be more responsible in all areas of their lives – including when they drive, and therefore are involved in fewer accidents.
  • Insist that your teens keep friends out of the car when they are driving.  While driving alone or with just one good friend will not qualify you for an insurance rate cut, the less distractions your young driver has with friends in the car, the safer they will drive and the les accidents they will be involved in.  Fewer (or no accidents) means lower insurance rates down the line.  Every year your teen can go without an insurance claim, the cheaper their insurances premiums will become.
  • Restrict cell phone use in the car. While you are at it, prohibit all cell phone use while driving.  Talking and texting have been proven to distract young drivers at a rate equal to a drunken adult driver.
  • Limiting your claims. Remember, every claim you make is held against your young driver. So, if they back into your own back fence, pay for the fix out of your own pocket.
  • Increase your deductible.  Sure it will cost you more if your teen is involved in an accident, but it could save you big bucks over the long haul in insurance premiums.

Insurance for young drivers can certainly break the bank if you are not careful. But following just a few of these simple strategies and you can enjoy a deep discount on your young driver auto rates.  And that won’t just save your bottom line, but their as well when they move out on their own and have to pay those insurance bills themselves.