Learning to drive can be exciting for teens, as it finally gives them a somewhat taste of the adult world. Auto insurance rates for teens, however, can be high due to a lack of driving experience. Parents typically pay for insurance by adding them to their existing plan. Here are some steps you can take as a parent to lower car insurance rates for their kids.
Why Car Insurance for Teens Is Expensive
Insurance companies set premiums based on various factors, including age and the risk of getting involved in an accident. The youngest drivers are considered high risk by insurance companies unless they achieve good grades and demonstrate excellent driving behavior. So, parents can get discounts for their kids under certain conditions.
Adding a teen driver to your policy will significantly increase your insurance rate, except in Hawaii, where you can expect a rise of only 3 percent. In all other states, the rate increase will be over 100 percent, based on CarInsurance.com data. States with the highest rate hikes for adding a teen driver include Arizona, California, Louisiana, New Jersey, Nevada, and South Carolina. In each of these states, the increase will be over 200 percent.
The average increase across the nation amounts to over $2,500 per year for minimum coverage when adding a 16-year old driver to the parent’s plan. Adding full coverage for the teen can rise to a $6,900 annual increase. Exploring low car insurance rates for parents is possible since each insurance company has its own criteria, and many are willing to give breaks. Costs are not as high for a 19-year old.
How to Lower Car Insurance Rates
When you pay thousands of dollars a year for car insurance, it’s possible to get better deals by shopping around. Comparing quotes online is the fastest way to find out the lowest rates.
The next step towards lower monthly insurance payments is checking the various discounts for which your kid may qualify. Many insurers offer good student discounts for A and B grade point averages because this evidence shows they are responsible and interested in learning. Studies support the notion that kids with higher grades are less likely to cause an accident.
Students also qualify for lower rates if they drive a low horsepower car equipped with safety features. The more the student shows they are conscious of reducing risk, the better chances of getting lower rates. Maintaining a clean driving record is advantageous. The same is true if the student takes a defensive driving course.
The state law decides whether or not a parent must add their teen to their auto plan. Most states typically follow certain basic standards, such as all licensed drivers in a household need to be covered by a policy. Otherwise, there’s a chance the insurance agency won’t cover a claim.
You mainly need to check with your insurance company to determine how your policy may include or exclude your kids. The agent will let you know if you need to list a teen who only has a driving permit and the requirements for drivers under the age of 18. In most cases, teens under 18 will not be able to find car insurance on their own.
Low car insurance rates for parents are available if your teen demonstrates safety and a low risk to the insurance agency. Young drivers and their parents can take proactive steps to make rates affordable. Contact our experts at Weaver & Associates for all your insurance needs.