As a parent of a teen driver, you may be shocked when you see your insurance premiums increase. It's natural that insurance companies see teen drivers as a higher risk -- they have less experience behind the wheel, and teenagers aren't necessarily known for always making the best decisions. But adding a teen driver doesn't mean that you have to break the bank each time you make a car insurance payment. Use the following tips to save money on an auto insurance policy with a teen driver:
Enroll Your Teen in a Defensive Driving Course
Many insurance companies offer a substantial discount on insurance premiums if a teen has completed a comprehensive defensive driving course. Most cities have several companies that offer these courses, or you may want to have your teenager sign-up for a semester of driver's ed at his or her high school. In addition to an insurance discount, a defensive driving course can help a teen learn smart driving techniques, which may prevent car accidents or driving infractions which result in even higher insurance costs.
Encourage Good Grades
Most parents want their children to academically succeed in high school, and good grades can result in a nice insurance premium discount. Many major insurance companies in the U.S. offer good grade discounts, but the amount of the discount may vary. Contact your insurance company to see if they offer this type of discount, and if they do, be prepared to submit a copy of your teen's class transcripts.
Choose Your Teen's Vehicle Carefully
If your teen is going to have his or her own car, keep insurance rates in mind while the two of you are shopping. Brand new cars that are high in value and sports cars are typically more expensive to insure and will result in much higher premiums for a teen driver. Your best bet is for your teen to drive a used car that is a few years old, is highly rated as a safe vehicle, and has a car alarm to help deter thieves.
Bundle Your Insurance Policies
Many people have multiple insurance policies, such as auto insurance, homeowners or renters insurance, and life insurance. If you hold several policies with different companies, consider switching all of your policies to one company. Most insurance companies offer a good discount for having multiple policies, so bundling may offset the increase in auto insurance premiums when you add a teen driver. Get quotes from each company that you currently have policies with and see which one offers the best deal. Various insurance companies, like Colling Insurance Services, Inc, set their rates differently, so you may be surprised at the variation between offers.