Teen Drivers and Auto Insurance

Watching your teen settle into the driver’s seat may bring up some anxiety—but concern over your insurance premiums shouldn’t be the cause of your worry. While teen drivers do pay more for auto insurance, there are steps you can take to mitigate the financial impact and help ensure your teen’s safety on the road.

Why Teens Pay More

As with everything in the insurance industry, auto insurance rates are based on risk—and teen drivers pose a significantly greater risk than adults. A study conducted by the AAA Foundation for Traffic Safety concluded that teen drivers are nine times more likely to be involved in an auto accident than those over eighteen, and six times more likely to be involved in a fatal crash.

Invest in Driver’s Education and Training

While some blame irresponsibility and impulsiveness for the high rates of teen-involved accidents, there is another explanation: simple inexperience. Driving is an acquired skill, and new drivers of any age are at a higher risk of accident during their first year of driving. Providing your young person with driver’s education and ample supervised time behind the wheel will put them ahead of the curve when it comes to practice and may be rewarded by your insurance carrier as well.

Provide a Safe Vehicle

As with all auto policies, insurance carriers extend preferable rates to teens who drive safe vehicles. While they may not be the hottest cars on the road, vehicles with high crash test ratings and plenty of safety features will lower your rates—and even more importantly—reduce the risk of injury in case of a collision. For guidance on purchasing a safe vehicle for your teen, consult the Insurance Institute for Highway Safety, a nonprofit organization that determines vehicle safety standards and tests vehicles for crashworthiness and collision avoidance.

Ask About Good Student Discounts

Some carriers reward students for their hard work through good student discounts. If your student has an A or B average, be sure to inquire whether your insurance company has such a program.

Add Young Drivers to your Existing Policy

Rather than purchasing a dedicated policy, consider adding your teenager to your existing household auto coverage. Adding a driver, particularly a young one will raise your rates, but will likely cost less than purchasing a second policy for your young driver.

Investigate Occasional Driver Discounts

If you have a newly licensed driver but no plans of purchasing them their own vehicle, you may be able to add them as an occasional driver at a significantly lower rate. Most carriers define an occasional driver as someone who’s driving makes up less than 25% of the vehicle’s time on the road, which means you may be able to add a young person who has limited use of a car on evenings and weekends at a lower rate.

Consult an Independent Agent

Auto insurance for young people varies carrier-to-carrier and state-to-state, which can make shopping for coverage confusing for a lay person. An independent insurance agent can help determine what kind of coverage is most appropriate for your family, and which discounts your teen may be eligible for. Remember, independent agents work for you, not the insurance company, so you can trust them to provide unbiased advice.

Concern over your newly licensed teen may be unavoidable, but skyrocketing insurance premiums are not. Keep price hikes to a minimum—and your young person safe on the road—by having your teen complete driver’s training and ensuring that their vehicle has a high safety rating. As always, the independent agents at Moreland Insurance are available to help shop for plans, hunt down discounts, and ensure everyone in your household has the auto coverage they need.