What Auto Insurance Discounts Are Available For Teen Drivers?

Dec 9, 2020 | Personal Insurance

As much as you avoid the inevitable, your children would still go through their teens. Part of that growth is becoming a teen driver. They need to spend more time practicing how to drive on the road to make them better drivers and more experienced. Most parents fear the fact that their teens are no longer kids and need to learn how to drive.  In addition to the parents’ worries is the increased premium it entails on their existing car insurance, should they consider adding them.

The great news is that there are discounts that you and your teen may avail of. There are insurance companies that grant discounts based on your child’s performance and some other factors that can be considered. We came up with the list of discounts you might try to lower your premium. As the best independent insurance provider in Denver, Colorado, we would like to show you some tips to lower your insurance premiums if your teens are going to be drivers soon.

Undergo A Teen Driving Program

Learning how to drive is not possible overnight. It may take days or weeks to learn that skill. Your teens may know the basics but having thorough guidance from an expert is better. You can teach them how, yes, but in a driving school everything will be properly explained. From the function of every part of a car, the steps to do before and after driving, and the rules to follow on the road. Driver education and training provide a 6-hour lecture that lasts for months. That is to make them more proficient in public roads.

Some states require teens to undergo this training. Submitting the proof of finishing that course to your insurance provider acquires a discount on your premium. Some insurance companies offer a 10% discount. The reason why they prefer teens to pass a driving program is that it is safer for a teen to drive with proper training. Safe driving means less danger and fewer accidents.

Add Your Teen’s Insurance in Your Policy

If you decide to purchase a new car for your teen, you might want to know if he must buy his own insurance policy. The answer is NO. Having a good credit score doesn’t apply to decrease your premium for your teen. Your teen is also not yet legal enough to sign the agreement alone. You still need to co-sign the contract as his legal guardian. 

Good to know that buying a new car for your teen and adding it to your policy qualifies you to a discount for having multiple vehicles. On the other side, it doesn’t mean you need to purchase a new car for your teen to have that discount. You may also add him to your insurance policy and won’t be charged as long as the teen is not yet licensed. Just inform your insurer that you are adding your teen to your policy.

Students With Good Grades Earn Discount

Teen’s good grades earn a discount on your policy. If he is on the dean’s list, an honor student, or has an average of B, almost 15% can be applied to your discount on your auto insurance. Higher premiums are given because of the teens’ lack of proficiency in driving. But with good grades in school, you may avail of the discount. The explanation for this is that students who ace in studies are more responsible.

Responsible students mean they are also responsible drivers. Teens must know that in order to keep this discount they should practice safe driving. Traffic violations and accidents may cause some increase in your premium. Most of the young drivers are quite reckless and boys get a higher percentage than girls. 

Older Cars Are Cheaper To Insure

It is a better choice to choose an older car for your teen. It is way cheaper to insure than new and expensive cars. It is easier to repair and the cost is not that much that’s why it is easy to replace. That’s the reason why insurers prefer to advise you with that type of car for your teens if you are looking for inexpensive policies. .Brand new cars are expensive to repair and easily attract thieves that incur high costs of insurance.

However, it must be safe to drive and would not put the driver’s life in danger. If that will happen, another rise to your premium will occur. You must prefer an older car that has features for safety and does not compromise the quality you are looking for. Also, try to talk to your insurer about what’s the right car to insure at an affordable price. They know the brands and their models that can be insured with a lower premium. 

Good Driving Record

If your teen continues to perform well on driving as he becomes legal, his premium gets lower as he ages. That means he has a good record showing no or fewer violations. Insurance companies reward good drivers with lower rates on their insurance policy. 

Since teen drivers often commit accidents and offenses, it is an achievement for them if they can make a clean driving record. There goes the advantage of taking a driving education. The more they are knowledgeable of proper driving and have more practice as they drive, the more their driving skills will upgrade. These will make them a good driver and might be earning a good reward for discounts. 

Teens Bound To College Get Discounts

College students that do not have access to a car unless they go home during vacations and breaks, would likely earn a discount. Some insurance companies provide a discount for teens going to college. It is called  “distant student discount” or “student away discount”. Some require that these students are 100 miles or longer away from home. They must be studying full-time and won’t have any access to anyone’s car while in school. 

Other parents fully remove their teens out of the insurance policy and some of the insurers allow that and call them  “deferred driver”. You can save a lot while your teen is away but keep in mind to insure him again once he goes back for vacation. He will be using his car or one of yours so it is a must for his security.

Assign Teens As A Primary Or Second Driver

Adding your teen to your insurance policy must be all clear to you. Including them would give a make or break to your policy. One way to reduce the increasing amount to your insurance is to assign your teen as the primary driver. You then have to ask your agent if it is possible. It is more inexpensive if they would agree. Also, it might be allowed if your cars are three or more than that.

Another scenario is if you only have two cars, your teen would be considered as a secondary driver by your insurance provider. You are the primary driver, yes, but you can not be the same primary driver to the other car. However, if you have multiple cards, you can be the primary driver for most of the cars you own. Just remember to assign a car that is older to keep lower insurance rates.

Install Telematics

Teen driving often comes with higher possibilities of accidents on the road. The reasons behind these are being inexperienced, reckless, and pretty adventurous which leads to uncontrollable risks. These misfortunes earned records and therefore launched the rules and regulations for teen driving. However, isn’t it unfair to compare your teen’s good driving skills and record to others who are reckless? Thus, your insurance rate increases because of that belief. 

Telematics has been a very good tool in monitoring driving skills and records. It is a box that has the size of a smartphone and has features like GPS and processing units that record information. The data includes travel distance and speed, how many trips in a day and its time, and how smooth the driving is. It is then transferred to a server through satellite. The data is uploaded to each client’s web portal and can be viewed by them to see their driving performance.

Enroll In Defensive Driving 

Most of the teens encounter driving accidents due to recklessness and being inexperienced. Yes, it is good to enroll them in driver education but it is also a good choice to let them undergo defense driving. This additional training will teach your teens proper behavior behind the wheel and practice safety by improving decision making. 

Defensive driving discounts on insurance are not available in some states, some do not offer such discounts. It is best to check with your insurance provider if they offer that. Taking this training to waive a violation won’t make you eligible for this discount. Also, to keep discounted you need to regularly update your knowledge on defensive driving. Some insurers require retaking the course every 2 years to avail of the continuous discounts.

Things To Know That Affect Teen’s Auto Insurance Rates

Some factors affect insurance rates when it comes to insuring teens. You might have overlooked the causes and be surprised why the price is higher than you expect. Here are some of the reasons why.

  • Teens tend to encounter risks more than adults. Since it is their first time to drive a car, you won’t expect them to pay attention to the rules and regulations on the road. They are more interested in feeling the rush of being able to drive on their own. They are still learning the process and getting used to it. Being inexperienced leads to some uncontrollable events they may encounter while traveling. Hence, the insurance rates are higher for teens than adults.
  • Teenage girls have lower rates than boys. Teenage boys are said to be riskier than girls when it comes to insurance. Girls are more responsible and avoid violations as far as they can. Usually, boys or men do not wear seatbelts, often engage in offenses, practice reckless driving, and the dangerous DUI ( Driving Under the Influence). 

DUI refers to the offense of being under the influence of drugs or alcohol while driving. This often leads to accidents because it disables a person’s ability to drive safely. Women are more cautious and attentive to details such as rules and risks they might run across the road. These factors help in computing the final rates and are lower than those of men.

Teenage boys’ insurance rates decrease yearly until they reach the age of 25 where it gradually drops. It won’t go up unless he reaches the age of 65 to 75 years old.

  • Auto insurance rates vary by state.  Auto insurance rates are different in every state. By performing well and having good records, it will decrease in time. Colorado lands he 11th place among other states featuring their auto insurance rates for 2020. Michigan is still in first place with its most expensive auto insurance rate. The factors that affect and differentiate the premiums with each state were the unique insurance strategies, thick population, plenty of uninsured drivers, and pricey lawsuits. 

Conclusion

Teens are stepping on the stage where they need to be more responsible for their actions. That is when they decided to learn things such as driving and be out on the road to explore. It’s quite expensive to insure them and might put your premiums on a rise. But the call for security is what an insurance company provides for parents who worry about their teens’ safety. There are discounts you may apply with your insurance granting that your teens comply with the qualifications needed. This will help you lower your policy rates.

You may opt to talk to our agent and inquire about these discounts available for you and your teen. Let us help you with the best offer we can give you. Call us today at +1 (720) 221-8168 to answer any question that you want to clarify with us and we will gladly guide you in choosing the right policy that best suits your needs.