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Before your teenager can get a drivers license, he or she will have to be added to an insurance policy. Many states and insurance companies require that all individuals in a household who are of driving age be added to the insurance policy, so he or she will probably need to be added to yours. These are a few ways that you can save money when insuring your teen driver.

1. Put Your Teen Down as a "Named Exclusion"

Even though your insurance company might require you to list your driving-age teen on your insurance policy, you may be able to list him or her as a "named exclusion." This basically means that even though your teen is listed on your policy, he or she does not drive your vehicles and is not covered by your policy. This means that your teen will need to be listed on a separate policy.

This is not always the best option; in some cases, you may get a cheaper rate by adding him or her to your policy, such as with a multi-car discount. However, if you have valuable cars, it might be cheaper for your teen not to be listed on your policy. It pays to get a quote for both options so that you can determine which is the best for your teen.

2. Encourage Your Child to Get Better Grades

You might already be worried that your teen's grades will start slipping now that he or she is driving, but there is another reason to be strict about good grades -- your insurance rates. Some insurance companies actually offer a discount if you show your child's report card to your insurance agent. Basically, insurance companies look at good grades as being proof that your teen is responsible and may be more responsible behind the wheel.

3. Choose the Right Car

Your teen might love the idea of driving a shiny new sports car, but you don't just have to worry about the cost of the car -- you also have to worry about how much it costs to insure it. Usually, older cars with not-so-fast engines are more affordable to insure for anyone, but this is especially true for a teen. This is just one more reason to give your teen for why you aren't buying his or her dream car.

As you can see, there are a few ways that you can reduce the cost of insurance for your teen driver. These are three things that can have a big impact and can save you and your teen a significant amount of money over the next few years. Contact a local agent, like Keyes Insurance Services Inc, for more information.