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Auto & Auto Buying

6 Ways to Cut Teen Insurance Rates

Driving a car is an exciting milestone for your teenager, but it’s one that may be causing you some concerns. You might be especially nervous about your auto insurance premiums skyrocketing. You’re right – your payments are going to increase. Teens are considered high-risk drivers because statistically they’re more likely to have accidents and receive tickets. Insurance companies offset this risk by charging higher rates to insure teens. The good news is you have options to help reduce the costs.

1. Make good grades. Generally, if your student maintains a “B” average, you’ll receive a good-student discount. The amount varies by companies, but some give up to a 20% discount. You can also take advantage of this discount for full-time college students.

2. Choose a safe car. Before you buy a car for your new driver, talk to your insurance agent about which cars are least expensive to insure – an older midsize sedan with a good safety rating or a newer car with more enhanced safety features. As a rule, you’ll probably want to avoid sports cars, trucks, and SUVs for new drivers – it can be costly! If your teen will be driving one of the family’s cars, ask your agent to designate the car that’s least expensive to insure to your new driver.

3. Ask the insurance provider about student discount programs. Be sure to visit your provider’s Web site for all the options. Some providers offer discounts if the new driver takes an online course, passes an online safe driver test, and writes, signs, and submits a good-driver contract. Also, ask if there’s a discount if your student goes to college and doesn’t take their car with them.

4. Enroll in usage-based insurance. A device is installed in your teen’s car and connects to the car’s computer and uses GPS to monitor their driving habits. It can include mileage, how hard the brakes are pushed, and driving times and areas. Some companies offer immediate discounts while others use the data for future discounts. Bonus for parents – you can also review the data!

5. Adjust optional insurance coverage amounts. It might be tempting to lower your liability insurance to the minimum and raising the deductible for the immediate savings, but it might not be worth it if there’s an accident. However, if your teen is driving an older car, you might consider adjusting the collision and comprehensive amounts. You don’t want to be paying more in premiums than the car is worth. Please talk to your agent for more details.

6. Get quotes. It’s usually cheaper to add a teen driver to your existing policy rather than purchasing a separate policy, but that doesn’t mean you shouldn’t comparison shop. You also have the option to switch your existing auto insurance policies along with a new policy for the new driver to another company to save money. As a Member of Orange County’s Credit Union, you have access to our trusted partner, Apollo Insurance Services. They’re available to review your current policy and make recommendations tailored for your individual needs. Click here for more information.

The above strategies are suggestions and do not constitute recommendations that will guarantee a decrease of your auto insurance premiums.