Why Having A Teen Driver On Your Policy Will Affect Your Rates
Taking your teen out to drive for the first time is scary, but the hit to your insurance rates when they are added to your policy can be even scarier. But don’t fret – you do have options when that time comes.
Your current carrier may raise your premium, but there’s nothing stopping you from considering other options and other companies.
When you add your teenage driver to your auto insurance policy, shop around for coverage and rates that best suit your changing family. Your car insurance needs are different now and a different carrier might be a better fit.
It is a good idea to compare rates every time you go to renew your policy and this is especially true when you have your teen driver on your policy as well. As they age and gain experience as a good driver, your rates may drop; so, by comparing your options again at renewal, you could maximize your savings.
Why Does Adding a Teen Driver to My Policy Affect My Rates?
Teenagers are considered a risky group to insure, so their rates tend to be higher. If you have been driving for a while, your carrier knows your driving history and can predict your future risk based on your past actions.
However, for a new teenage driver, they can’t base rates on past driving behaviors and instead use feature rating to link premiums to expected risks that come along with being a new driver.
Men under the age of 25 pay the highest auto insurance premiums on average. After age 25, it lessens. But for those earlier years, teens can expect to pay higher rates due to inexperience and historically higher instances of claims and accidents.
This makes sense considering the sobering statistics around teenage drivers. Teens are almost three times more likely than older drivers to be involved in a fatal crash. Motor vehicle accidents remain the leading cause of death among teenagers, with six teens dying each day from injuries they sustain in auto accidents.
Lower Your Premium by Shopping Around
If you have not shopped for auto insurance in a while, a major life event (like adding a teenager to your policy) is a great time to compare rates. While you may have been with your carrier for a long time, they may not offer you the best rates once you add a teenage driver. Comparing rates can save you money, especially when your life situation changes. Compare.com’s car insurance calculator lets you see other carriers’ rates compared to your own so you can make an informed decision.
Remember that rates are based on a snapshot in time. If you have not looked at your current picture in a while, your circumstances might be very different, which could lead to cheaper rates than you were quoted in the past.
Not All Carriers Rate Risk in the Same Way
One important reason to shop around for coverage for your teen driver is that some insurance companies rate risk differently. For one carrier, a teenage driver might cause a much higher premium increase than for another carrier.
Your own carrier may not even be the best option for your teen, so rather than adding them to your policy, you may want to purchase a separate policy for them. This may be through a different carrier than the one you usually use.
Because car insurance companies specialize in different types of risk, the rates for your teen may be better elsewhere while your rates are best with your current carrier. Either way, comparing all of your options lets you find the best circumstances for your unique situation.
Ask for Discounts
Your teenage driver may affect your premiums no matter what you do, but you also may be eligible for some additional discounts because of their behavior or affinities. Good student discounts are well-known, and you should take advantage of those if they apply to your teen.
But there are other discounts, too. Some vehicle owners are eligible for affinity discounts due to owning certain vehicles. Mini Cooper, for example, partners with Liberty Mutual to offer Mini drivers a special discount.
Your carrier may discount your premium if you install additional safety and telematics devices for your teen driver. Some telematics devices measure things like miles driven, acceleration and braking rates, and hard turns.
The savings can be substantial by sharing your data with your carrier. Progressive notes drivers can save up to $145 using their Snapshot telematics program to prove they are a safe driver. Allstate reports their telematics program, Drivewise, offers an initial discount upon signing up and more incentives after completing a certain number of safe trips. Pay attention to these discounts when you compare auto insurance rates.
Some fleet vehicle carriers have begun experimenting with driver-facing cameras that can monitor driver behavior and intervene accordingly. For example, if a driver’s eyes stray from the road or begin to close, the camera picks it up and offers reminders to focus on the road, or incentives like a free cup of coffee to stop and take a rest. This technology could help teen drivers learn and stay safe, so personal auto applications may be coming next.
Defensive Driving Course
Insisting your teen take a driver’s ed or defensive driving course can do more than educate them about safe driving. Many carriers offer discounts for driving courses.
Be sure to ask for this discount once your teen passes their driving course. If you have not completed a defensive driving course in a while, you may want to also take one yourself. Show your teen you also care about safe driving, and earn a discount at the same time.
Consider taking action to reduce your risks before anything happens with your teenage driver. Teaching your child safe driving habits yourself is the first step. Taking a safe driver’s course together could be beneficial.
Comparing auto insurance rates may make the biggest difference of all. You might find a better rate six months or a year from now.
Install a Dashcam
Dashcam footage is popular entertainment online, but it can be useful data to an insurance company. It acts as an objective witness in the event of an accident.
If your teenage driver – or any driver – is involved in an accident, objective data from a dashcam can help show the circumstances of the loss, evasive action taken, and the fault of drivers.
Monitor Safe Driving
Keep talking to your teen about safe driving and make sure you continue to monitor their driving habits. Talk about defensive driving and how they could handle various driving situations they may encounter. Set limits that make sense to your family – whether it is not driving late at night, no friends in the car, or mobile phones set to ‘do not disturb’ while driving.
Establishing boundaries for your teen can go a long way toward building safe driving habits that could result lower rates.
Reward Safe Habits
Show your teen the premium differences between safe and unsafe drivers. Helping them understand this now can benefit them throughout their life. Consider rewarding your teenager for safe driving to incentivize good behaviors, such as giving them a percentage of the premium money saved by their good driving habits or offering to get them a special gift if they keep it up.
Why is it important to shop around for auto insurance when adding a teenage driver to the policy?
Any big life change is a good time to shop around for auto insurance, as it may affect your rates more than you expect. Adding a teen driver can be a good reminder to prompt you to compare your options. While you can likely expect your rates to increase with the additional driver, the amount varies from carrier to carrier. Shopping around ensures you get the best rate possible for your new circumstances.
How can I compare rates easily when adding my teen to my policy?
Using online comparison calculators like the one at Compare.com can help you easily and quickly identify your options for review. You can see in-depth comparisons of 50 different carriers. It is also easy to input your data on Compare.com, and best of all, it’s free to use.
Do I have to add my teen driver to my existing policy?
No. In fact, it might make more financial sense for them to get their own policy separate from your existing auto coverage. Rates can vary greatly, so it makes sense to explore the various ways you can get coverage to find your best rate. Some carriers focus on teens or higher-risk drivers, so they may be able to offer you a better rate than your existing insurance company.
Why do rates differ from carrier to carrier?
Each insurance company weighs risk factors differently to come up with premiums. It may be that a certain company specializes in teenage drivers so their rate is more competitive, or another carrier might offer discounts that make their rate more acceptable. Since each carrier is different, so comparing options and thoroughly reviewing product offerings is important. Conditions change over time, so shopping around often can help save you money.
Why does adding my teen driver to my auto policy affect my rates?
Teenagers are a high-risk group of drivers. They have the highest rates of accidents and are more likely than older drivers to be involved in fatal collisions. Their inexperience as drivers is a factor, as well. As your teenager ages and gains experience as a safe driver, they can expect to see rates reflect that maturity and good driving history.
What other life events might affect my auto insurance rates?
Many different life events can affect your rates, which is why it is so important to shop around often to compare rates. Moving, buying a house, getting married, changing jobs, and getting older can all affect your rates. If you have experienced any of those life events and have not compared your auto insurance rate, you may not be getting the best rate. Use Compare.com to be sure your rate is still the best for your current situation.
Now that you understand why you should shop around for car insurance when adding your teenage driver to your policy, visit us at Compare.com to quickly see your car insurance options. Our site makes it easy to compare your coverage, discounts, and rate options. Once you have learned more, purchase the best policy for your family and your teenage driver. To learn more about comparing auto insurance quotes, visit our website at Compare.com today. Our licensed professionals will be happy to answer any questions you have.