Minimize the Cost of Adding a Teen to Your Insurance Policy

Teen learning to drive to get her first car

It’s no secret that insuring a teen driver can make your auto insurance significantly more expensive. As freshly-licensed drivers, teens are particularly accident-prone. Studies show that 1 in 5 16-year-old drivers have an accident within their first year of driving. While we hope your newest drivers as accident-free, here are a few tips to help prevent your rates from jumping up unexpectedly and keep your insurance plan cost-effective:

Tips to Help Minimize the Cost of Adding Your Teen to Your Insurance Policy

Brag about your student’s grades! 

We think hard work deserves a reward, which is why many insurance companies offer a Good Student Discount. This discount is usually available to any student on your auto policy with at least a “B” average in school.

Have them help pay for it.

Some families choose to have their teen drivers help pay for the additional amount they add to the policy. Not only does this soften parents’ financial obligations when adding a teen to their policy, but it also helps teach teens about budgeting and how to be responsible with money. Not to mention it will give them a vested interest in keeping their rates down.

Insure more than one car. 

Adding another vehicle to your policy is often more cost-effective than people realize another discount—insuring more than one car can save you money. This is one of the few times in life buying something for your teen can actually end up saving you money, so cash in!

Bundle your insurance policies. 

Teenagers can be pretty expensive, so you want to save wherever you can. Bundling your home, life, and/or motorcycle can save you additional money on your car insurance.

Look for accident forgiveness.

This is additional coverage that most insurance companies offer that can be added to your policy. Upgraded accident forgiveness ensures the first chargeable accident that occurs on your policy will not increase your rates. Since teens are more likely to have an accident within their first year of driving, upgraded accident forgiveness could end up saving you money.

Keep in mind how much of the year they’ll be driving. 

It doesn’t make sense to pay full price to insure a car that isn’t being driven most of the time. Some insurance companies offer a student-away-at-school discount for students who attend school away from home and don’t have their car with them. While this discount may not be applicable to your 16-year-old, it’s a good thing to keep in mind for older teens heading off to college.

Consider adding a Diminishing Deductible.

A Diminishing Deductible can reduce the collision deductible on your policy each year by $100 just by being a safe driver. This can save you money and encourage safe driving for your teen.

These tips, along with good driving instruction and lots of practice, can help you minimize the cost of adding a teen to your policy.

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