The Best Car Insurance For Young Drivers

Lucy Lazarony November 3, 2020

What’s the best way to get car insurance for a teen driver? In most instances, you can add your teenager to your existing auto insurance if they have a driver’s license or driver’s permit. Getting a stand alone insurance policy for a teen driver can be quite pricey. Teens usually drive fewer miles than adults, it’s true. But they aren’t as experienced behind the wheel and are more likely to be in an accident. Their age and inexperience lead to higher insurance rates. And that’s why it’s almost always far less expensive to add your teen to an existing policy. Because teens pose a greater accident risk, parents may wish to increase liability limits on the family car now that the teen will be driving. The rest of the insurance coverages will apply to the teen driver as well and benefits such as roadside assistance. So if something goes wrong with the car, your teen will be able to call a tow truck for assistance. Let’s take a closer look at how to find the best insurance for teen drivers.

Teen Drivers with Their Own Policies

It can be quite expensive but teen drivers can get their own insurance policies. If you decide you want your teen driver to have their own insurance policy, here are a few things to keep in mind.

Choose the Right Liability Limit. You want liability coverage that will safeguard assets if your teen causes damages or injures someone else. The Insurance Information Institute recommends $100,000 bodily injury liability per person, $300,000 bodily injury liability per accident and $100,000 property damage liability. If these coverages cost too much for you teen, maybe you could offer to pay them? It is important that a teen have adequate liability coverage. Auto insurance is regulated at the state level. And the minimum liability coverages required by the states are too low to cover damages in a serious accident. And that is why the Insurance Information Institute recommends the higher limits.

Choose the Right Deductible. A deductible is the amount you need to pay before your auto insurance company begins to pay for damages to your car or losses. You want to choose a deductible that a teen can afford to pay in cause of an auto insurance claim. So discuss this amount with your teen. Once you come up with an amount, put the deductible amount in a small emergency fund. That way the money will be there if your teen should need to make an auto insurance claim.

Insure Less on Older Cars. If the car on your teen’s policy is paid off, your teen won’t be required to carry collision coverage and comprehensive coverage.

Collision coverage is coverage that helps to repair or replace your car if it’s damaged in an accident with another vehicle or object such as a tree or a fence. Comprehensive auto insurance covers events not covered by collision coverage. These events include fire, theft, vandalism and damages from weather such as a tornado, a hurricane, a windstorm and a hailstorm.

These are good insurance coverages that are required by lenders when cars are being financed. But these insurance coverages may not be needed on older cars.

The maximum payout for collision coverage and comprehensive coverage is limited by the value of the car. So if your car has a low market value, it may not make financial sense to carry collision coverage and comprehensive coverage any longer.

How to Get Discounts for Teen Drivers

If a teen gets a B average or even better, they have just earned themselves a good student discount on their car insurance. Be sure to let your auto insurance company know of your teen’s good grades so they will apply a good student discount to your policy.

Find The Best Insurance for Young Drivers

As teen drivers become more experienced and avoid tickets and accidents, the cost of auto insurance will go down. Teen drivers will see their rates drop by 10 percent at age 18 and by 16 percent at 21. That is 31 percent in three years. Growing up is good for auto insurance rates.

And don’t forget about a good driver discount. If your teen is an accident-free driver without a single speeding ticket or violation then they will qualify for a good driver discount. So once a teen has a year of good driving under their belt, be sure to let the auto insurance company know.

What Happens When My Teen Driver Goes Off To College?

A teen driver can still be covered on a parent’s policy as long as the parent’s address is the teen’s permanent address. If a teen will have a car on campus, let the auto insurance company know the zip code of where the car will be kept most of the time. Will it be at their apartment or parked on campus?

In some states, a parent can’t cover a teen’s car on their insurance policy if the car and the teen will be going to an out-of-state college. In those instances, the teen would have to purchase their own policy. Be ready to do some research.

The best way to get a good deal on auto insurance policy is to shop around. SmartFinancial makes this easy to do. Just input your zip code and answer some quick questions and you’ll be comparing car insurance rates near you in no time.

SmartFinancial has access to more than 200 insurance companies so you’re bound to find a good insurance deal for your car.

What Happens to a Car Left at Home?

What happens if the teen leaves his car at home when he goes to college? First of all, the teen should let the auto insurance company know that the car is parked in the parent’s driveway and is not being driven because the teen is away at college. There might be a discount available. This goes for parents as well. If the car is insured with a parent’s policy let the insurance company know that the car is not being driven because the teen driver is away at college.

As tempting as it may be to pull insurance from a car that is not being driven, it is important to maintain continuous coverage with your auto insurance. A break in coverage will lead to higher insurance rates when you start the coverage up again. So hold steady with your auto insurance, your teen driver will be home from school again in no time and the car will be getting plenty of driving time.

And here’s a strategy for that insured car in the driveway, choose a usage-based insurance policy. You get personalized rates based on how much you drive the car. A car’s usage is monitored when a mobile app or device gets plugged into the car. Since the car is not going anywhere the majority of the time the driver is at college, you’ll enjoy big savings.

Advantages of Staying on a Parent’s Car Insurance Policy

Teens and young adults into their 20s are keen to assert their independence but car insurance is one place they will want to stay with Mom and Dad as long as possible.

Sharing a policy with your parents is much less expensive than striking out on your own for car insurance. So you will save a lot of money on car insurance premiums by staying on a parent’s policy. If your parents put your name on the insurance of all the family cars, you’ll have your pick of cars to drive. And if there is one set aside for your driving purposes even better.

A Money-Saving Tip

And if there are family cars that a teen never drives, the parents may want to remove the teen’s name from that policy to save a little bit of money. Talk it over as a family. If your teen never drives the father’s car, why have his or her name on the policy? But if you like the idea of your teen being able to drive all the family cars just in case something might happen, then leave the teen on all the policies. Choose the strategy that works best for your family. Just make sure you’re paying the least for the best coverage by comparing rates.

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