Top 10 Tips For Buying Teen Car Insurance
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Buying car insurance can feel like a chore for anyone, but it can seem like an especially intimidating task when it comes to acquiring insurance for a teenager.
According to Forbes, adding a 16-year-old son to a family car insurance plan will raise the monthly bill by an average of 92% while adding a 16-year-old daughter will raise the cost by a lessened, yet still staggering, average of 62%. And while these numbers are a bit alarming, there are tips and tricks for parents to take use when buying insurance for their newly-licensed teen.
1. Take advantage of good grades
A high grade point average, strong attendance record, and all-around good track record at school can help score a lower insurance rate for a teen driver in high school or college. On average, these discounts range from five to 10 percent, depending on the insurance provider. For instance, Liberty Mutual offers this perk to drivers aged 25 and under that maintain a B average (equating to a 3.0 grade point average) or better.
2. Pick the right vehicle
Picking the right vehicle for a teen can also attribute to a lower insurance rate. Although many believe it to be true, the color of a car doesn’t impact the insurance cost, but other factors such as the make, model, and year of the car does carry some weight in this matter. This is because new cars are more expensive to insure, and the same goes for cars with a high level of horsepower.
Instead of picking something brand new and flashy for a teen driver, opt for perhaps a lightly used car that has all the right safety features. This includes anti-lock brakes, updated airbags, and stability control. Cars that are no more than three or four years old and that receive a clean bill of health will be the cheapest to insure for a new driver.
3. Consider a raised deductible
A raised insurance deductible can assist in scoring a lesser monthly bill for car insurance when a teen is added onto a family plan. A deductible dictates the amount that is paid out-of-pocket in the event of a claim. After that deductible is paid, the chosen insurance company will pay for the balance of any damages incurred.
While it may seem counterintuitive to actually sign up for a higher deductible, making this choice does decrease monthly premiums significantly. In fact, MetLife cites this as a way to reduce insurance costs across the board. This is a bit of a risk, but cranking up a deductible as much as possible will allow for some serious savings. Keep in mind, that deductible only needs to be paid should a claim for an accident or damage be submitted.
4. Look into telematics (monitoring a vehicle)
Another way to save on teen car insurance is to use telematics in the driver’s car in order to receive a discount. These are devices that record and report a driver’s habits, which are particularly useful not just for insurance companies, but for parents, too! Insurance companies give breaks when these are used—given they show positive habits—as they make it easy to reward good driving behavior and it makes it simple to receive feedback on a teen’s driving.
Nationwide has a program that uses telematics, granting a five percent break in teen insurance upon signing up and up to 40 percent off based upon habits once the device is installed. Their device tracks four different factors: hard braking, fast acceleration, miles driven, and nighttime miles.
5. Chat with an insurance provider
Especially when adding a new driver to an existing insurance policy, it’s important to chat with an insurance provider about the changes a plan will incur in detail. Insist upon hearing the ins and outs of the policy, changes, price increases, and ask about available discount eligibility. Use Grange’s “Find an Agent” button to speak with one of their knowledgeable representatives to learn about their teen driver coverage options.
6. Consider an individual policy
Teens can purchase their own insurance policies, and in some cases, that’s actually a financially smarter option. Particularly if a teen owns a luxury sports car, it would be worthwhile to look into them acquiring their own plan. Another reason to opt for an individual plan is so that a new driver can learn financial independence—a great skill to start building early!
7. Enroll in a course
Teens who take the time to complete an added driver’s education or defensive driving course can score an additional discount when buying their own car insurance or being added to a family plan. These courses have to be outside of the minimum state-mandated drivers’ educational courses and training, but it may be worth it for the 10 to 15 percent discount that could result from it. Depending on the carrier, online courses could fulfill the requirements for achieving this discount. For instance, The Hartford offers discounts for teens that take an additional course.
Just make sure the class is sanctioned by your insurer to get the discount.
8. Understand optional coverage factors
There are certain coverage options that are optional, and depending on the type of car a teen drives and whether it’s currently being financed, may be unnecessary. Skipping them could help to save some money on insurance premiums.
These options included collision and comprehensive coverage. If a teen has an older car that is not being financed, skipping these coverage items could be useful.
9. Ask about multiple-vehicle insurance discounts
Many providers offer multi-car discounts, so that’s an additional factor to ask about it adding another vehicle to an existing family plan.
10. Understand differing offers by state
Depending on where a new driver lives and what state the insurance will be purchased in, there are different ways to save and to be strategic in either purchasing a teen their own insurance or adding them to a family plan. Researching insurance deals, discounts, and tips by state helps to ensure the best deal and coverage is achieved.
Insurance policies are an important part of being a driver that is protected in the different situations that could arise when one takes on the road. Since teenagers are the age group with the highest crash rate (as stated by Consumer Reports), it’s especially vital to properly insure these new drivers. Since the world of insurance, of any kind, car insurance included, can be hard to navigate, these tips are meant to simplify the process and to help ramp up savings where possible.
Source: teensafe
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