The moment when you finally hand your car keys over to your teenage son or daughter and watch them drive away can evoke fear for even the most calm and controlled parent! Some parents are concerned with safety, while others wonder if they will be able to cover the cost. For those who are wondering when exactly their teenager should be added to their insurance and just how much they can expect to pay, we made this week’s blog post with your potentially-nerve-wracked self in mind. 

What are Some Key Things to Know About Auto Insurance for My Teen?

First, one form of relief can come as a perk of a learner’s permit. If your teenager is still officially covered under a learner’s permit most insurers don’t charge extra, because they are confident that someone else is there watching them to prevent accidents or other mishaps. Once the teen takes the driver’s test, passes, and acquires their license, you then must formally obtain a policy. With less experience behind the wheel and statistically higher accident rates, teenagers always face the highest cost of insurance. Following are some of the reasons that teens struggle with higher insurance rates:

  • Overall inexperience 
  • Reluctance to wear seatbelts
  • Higher rates of distracted driving
  • Higher rates of drinking while driving
  • A time-proven tendency to speed
  • Higher likelihood of nighttime or weekend incidents

How Much Can I Expect to Pay to Insure My Teenage Driver?

Just as it stands with other forms of insurance policies such as homeowners and motorcycle policies, the answer depends on the state you reside in. Age and gender are also a factor, as a 16-year-old will end up costing more than a 19-year-old, and a male will be more expensive than a female. After the various data acquired from last year’s Carinsurance.com study was compiled, the results claimed that the average cost of adding a teen to your auto insurance policy is $3,798 per year, or a quite pricey $316.50 per month. Some teens are holding part time jobs with longer hours than average just to fit the bill for these exorbitant costs. 

What are Some Tips to Keep These Costs Down?

It IS possible to secure coverage without completely breaking the bank, as a bit of consideration and proactive measures will make a difference in premium costs. Even after the pandemic had eased up a bit, all of us here at the Alexander Agency of St Charles could tell that families were still hurting and compiled this shortlist to be of assistance. 

  • Hold off Altogether: We know that your teen may not want to hear this right off the bat, but if you wait longer, the costs will not be as high. It’s a bit less fun to take this route, but some metropolitan areas have made strides 2 lower their fares and make public transportation more accessible.
  • Consider Inexpensive Used Cars: It could prove to be much less expensive to buy your teenager an older or slightly beat-up vehicle and shell out for liability only. Even adding your teen driver as an uninsured driver of your own vehicle could be expensive if you are enjoying the benefits of a newer crossover, truck, or sedan. This tends to vary by the insuring party but will at least allow your new driver to get some experience behind the wheel before they choose something fancier.
  • Consider Usage-Based Insurance: UBI programs use telematics to keep an eye on driving habits, such as distance, speed, and how aggressively you are braking. If your teens prove themselves with a solid 6-month or year-long streak of good driving behavior, UBI can lead to discounts that will allow the whole family to have more money left over each month.
  • Increase Your Deductible Limit: If you are willing to opt for a higher deductible, your premium costs will go down. Make sure to talk to one of our agents, who will discuss a feasible balance between deductible amounts and premium costs that are sensible enough for you to pay for, and will “meet all parties in the middle” regarding risk.
  • Proactively Encourage Good Grades: Many insurance companies will offer sizeable discounts to students who are actively maintaining excellent academic standing. Encourage your teen to do well in school, as nailing down a certain GPA can be another great way to reduce your rates. This one can be difficult for a teen who is already distracted by the potential for freedom on the road with their very own wheels, but it can prove to be well worth it!
  • Always Ask About Driver Discounts: There are all types of other discounts available when looking to cut costs for a new teen driver. For some companies, these savings come in the form of a distant student discount if the young driver moves away to attend school and the car stays behind. Low mileage, multi-vehicle family plans, and other tactics can all be considered as a great way for a company to extend its knowledge and experience to get your teen driver a better rate. 

One of the best ways to keep teen driver costs at bay is to teach young drivers from the start just how important it is to drive safely, unfortunately, so many films and videos have encouraged otherwise, including footage shot by teens themselves! Since teens are the most inexperienced driving demographic, they, unfortunately, can suffer a high number of fatalities. One example of a company that does everything they can to help teen drivers offset costs is State Farm, who usually offers up to 25% discounts for students with good grades. 

Everyone here at the Alexander Agency of St Charles can understand that seeing your team behind the wheel can be a trying and unnerving time. We will assist you with the ideal quotes, perhaps calming you down a bit, and providing consistency and service for your younger ones that will soon be driving away from the comfort of the nest!