Having a teen driver in the house is not only nerve-wracking, it’s expensive, too! If your teen will be driving soon, be prepared to see your auto insurance premiums go through the roof. Taking these five steps to balance out the costs of insuring your teen driver:
1. Raise Your Deductibles
If your deductibles are set at $250 or $500, raise them to $1000. Not only will raising your deductibles cut down on your monthly premiums, but higher deductibles will help you resist the temptation to make multiple small claims. If you’re worried about not having the money to cover your deductible, add a bit more to your emergency stash every month.
2. Revisit Your Coverage
If you have cars that you’ve recently paid off, take a look at your insurance policy. Find out your car’s value on Kelley Blue Book; if your car is totaled, would you have enough to pay it off? Think about this: if you are in an accident, the lower your car’s value, the more likely it is to be totaled rather than repaired. This may mean you are paying premiums for a car that simply isn’t worth the cost. Consider dropping comprehensive and collision coverage for these types of vehicles.
If you’ll be purchasing a vehicle for your teen, look for a family sedan that is several years old. A new car will cost you more to insure. An SUV or truck can cost double or triple that of a sedan when insuring a teen driver. If you aren’t planning on buying your teen a vehicle, contact your insurance agent and find out if you can assign your teen to just one car in your home. If your insurance company allows this, you can assign your teen to the vehicle that is most cost-effective to insure.
4. Help Your Teen with Homework
Almost every insurance company offers a discount for teen drivers will good grades. Many companies will continue to insure your child, under your policy, until they are 25, provided they are in school. If your teen has a B average, they’ll qualify for a good student discount. These discounts can often save you ten to 15 percent on your monthly premiums.
Good student discounts aren’t the only discounts available. Be sure to contact your insurance agent any time your living or work situation changes. There are a myriad of discounts, not commonly advertised, that you may qualify for.
The best thing to remember is that you are never tied to an insurance policy. When it’s time to insure your teenager, get online and gather quotes from several different companies. Even if your current policy isn’t set to expire for a few months, you’re free to switch companies. Your current company will send you a refund for any months that you have remaining on your policy. You’ll need to decide if the cost savings makes it advantageous to switch early or if you can wait until your current policy expires.
Insuring your teen driver will be expensive, of that there’s no doubt. By reducing your insurance premiums as much as possible, you can easily offset the cost of insuring your teenager. Shop around, ask about discounts and raise your premiums; following these steps will ensure that you are getting the best rate possible for your policy.
Author Sandy Landsford is a mom and an accountant, she blogs for www.carinsurance.org.uk, where you can get a quote for cheap car insurance!