As a parent, you may be dreading the increase in auto insurance rates as much as you dread your teenager getting their driver's license. Auto insurance is one of those necessities that no one looks forward to paying for, but everyone knows they need it. Unfortunately, when your teenager gets their driver's license, you need to add them to your policy, which will likely cause your auto insurance premiums to go up. You can do things, however, to help offset the cost. Here are some key things you need to know.
The increase in your auto insurance premiums is based on a variety of factors, including your teen's:
- Driving record
Additionally, the type of car your teen drives will also impact your premium. If you are looking for a car for your teen, you may want to consider one that is less expensive to insure.
Consider raising your deductible if you have the financial ability to do so in case of an accident. A higher deductible will lower your premium, giving you some relief from the cost of insuring your teenager. Be sure to shop around and compare rates from different companies before you purchase a policy.
An educated teenager saves you money. While you can often save on your premium by having your teen take a driver's education course—and many states require it—you may also be able to get a discount if your teen maintains good grades in school. Most insurers offer a 'good student' to high school and college students who maintain at least a 'B' average. Investopedia reports that the discount can be as high as 25 percent off.
Some auto insurance companies offer the ability to download an app on your phone to save on your teen's premiums. The app, sometimes called an insurance tracker, observes your teen's driving habits and gives you feedback on aspects of your teenager's driving, including:
- Fast cornering
- Phone usage while driving
The app also allows you to set limits on things like speed and the time of day your teen can be on the road. If your teen exceeds the limits you set, the insurance company will notify you.
Adding your teenager to your auto insurance can be daunting, but it doesn't have to be if you are prepared. Do your research, compare rates from different companies, and encourage safe driving habits by leading by example.
For more information, contact an automobile insurance company near you.