Buying Car Insurance for Teenagers

Teen drivers are considered as the most risky customer segment by auto insurance companies. If you are a parent and you need to buy insurance for your teenagers, then you need to do your homework before even buying the car for your teen that is going to drive. Reviewing available discounts, insurance rate for cars, and right coverage selection can save you time, money and provide you peace of mind.

First of all, let's understand what risk means for insurance companies. Risk is the likelihood that a driver will file a claim or cause an accident that costs the insurance company money. The higher the risk, the higher the premium. Insurance companies use various factors to determine the risk level of each driver, such as age, gender, driving record, location, vehicle type, and more.

One of the most important factors is age. Why? Because age correlates with driving experience and the risk of getting into a car accident. According to the Insurance Institute for Highway Safety (IIHS), drivers aged 16-19 are three times more likely to be involved in a fatal crash than drivers aged 20 and older. That's a huge difference!

So why are young drivers more prone to accidents? There are six main reasons:

- Lack of experience. Young drivers have not had enough time to practice and master the skills of driving. They may not be able to handle unexpected situations or hazards on the road, such as bad weather, traffic jams, or aggressive drivers.
- Distraction. Young drivers are easily distracted by things like texting, talking on the phone, eating, or chatting with other passengers. These activities take their eyes off the road and their hands off the wheel, increasing the chance of a collision.
- Recklessness. Young drivers tend to be more impulsive and adventurous than older drivers. They may speed, run red lights, tailgate, change lanes without signaling, or engage in street racing. These behaviors put them and others at risk of serious injury or death.
- Impairment. Young drivers are more likely to drink and drive than older drivers. Even a small amount of alcohol can impair their judgment, reaction time, and coordination. They may also be more susceptible to peer pressure and get into a car with an intoxicated driver.
- Non-compliance. Young drivers are less likely to follow the rules of the road and wear seat belts than older drivers. Seat belts can reduce the risk of fatal injury by 45%, according to the IIHS. But only 58% of teen drivers said they always wear seat belts when driving with someone else.
- Inexperience with different vehicles. Young drivers may not be familiar with how different vehicles handle and perform on the road. They may not know how to adjust their driving style according to the size, weight, speed, and power of their vehicle.

As you can see, young drivers pose a financial risk to car insurance companies due to their lack of experience behind the wheel and their tendency to be more distracted, reckless, impaired, non-compliant, and inexperienced with different vehicles. That's why they have to pay higher rates than older drivers.

1) When your teen is on a learner permit: You should add the teenagers to your auto insurance policy when they get their learner permit. Some insurance company does not require coverage on a learner permit driver. You should add the teen families oldest and the least expensive car. This will help you only sometime when your teen becomes standard driver then you should immediately think about getting coverage for your teen.

2) When your teen is on a driver license: run 2 scenarios to see keeping the teen in your existing policy may make sense if your premium does not go more than the benefit having multiple car discounts in your policy. Do not buy fancy little hot car for your teen. These cars are flashy for teens and auto insurance companies charge large premium or those cars. Think older cars for younger drivers, premium on older cars are less expensive.

Raise the insurance deductible in your teen’s policy. It brings down the insurance premium. For example raising the deductible from $100 to $500 can bring down the insurance premium 10% to 20%.

Get multiple quotes: This is easy at your fingertips. You can go to online websites enter information and get quotes from much major auto insurance company. Sometime quotes differ greatly. You may end up paying $1000 per year in some cases

Check insurance prices before you buy any new car for your teen.

Auto insurance companies differentiate themselves from each other. Some companies focus on getting everything done online so that they can save operational cost and advertises that they are passing these savings to consumer and provide convenience to consumer. Others promote having local contact when you have question. Others install a device to your car require you to drive safe. So ask if they have any program to bring down the cost for your teen’s first insurance policy.

If you are a teenager or a parent of a teenager, you might be wondering how to save money on auto insurance. Auto insurance can be expensive for young drivers, especially if they have little experience or a poor driving record. But don't worry, there are some ways to lower your premiums and get the best coverage for your needs.

One of the most common ways to get a discount on auto insurance is to take a driver education course. Many insurers offer discounts for drivers who complete an approved course that teaches them the basics of driving safety, traffic laws, and defensive driving techniques. Some courses may even include behind-the-wheel training with a certified instructor. Taking a driver education course can help you improve your skills, avoid accidents, and qualify for a lower rate.

Another way to get a discount on auto insurance is to maintain good grades in school. Many insurers offer discounts for students who have a grade point average of 3.0 or higher, or who rank in the top 20% of their class. Some insurers may also offer discounts for students who score well on standardized tests, such as the SAT or ACT. Maintaining good grades can show your insurer that you are responsible, diligent, and less likely to engage in risky behaviors behind the wheel.

A third way to get a discount on auto insurance is to drive a safe and reliable car. Some insurers offer discounts for cars that have certain safety features, such as airbags, anti-lock brakes, or anti-theft devices. Some insurers may also offer discounts for cars that have low mileage, low repair costs, or high crash-test ratings. Driving a safe and reliable car can reduce your chances of getting into an accident, filing a claim, or paying for repairs.

These are just some of the available auto insurance discounts for teenagers. Depending on your insurer, you may also qualify for other discounts based on your location, family situation, loyalty, or bundling. To find out more about the discounts you are eligible for, you should contact your insurer or compare quotes from different companies online.

Auto insurance is an important investment for any driver, especially for teenagers who face higher risks on the road. By taking advantage of the available discounts, you can save money and get the best coverage for your needs.

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