For many parents, the day that their teenage child qualifies for a drivers license is fraught with mixed emotions. One thing that can’t be denied though, is the exasperation brought about by an increase in automobile insurance premiums when a teenager is designated as a capable driver. So parents should know not only when to add teens to auto insurance policy, but also how in order to save money.
It’s a matter of fact that insurance companies can increase your premiums by as much as 300 percent if you add your teenager to your auto insurance policy. This is because the statistics that govern the insurance industry point to the fact that teenagers tend to become more involved in accidents because of reckless driving, a trait brought about by the exuberance of youth and a feeling of invincibility during that age. Traditionally, having a male teenage driver would raise your auto insurance rate more, but nowadays, there are insurance companies that don’t distinguish between male and female teenage drivers – if you have a teenage driver, your insurance rate goes up, period.
To save on insurance premiums, some canny parents list their teenager as a “pleasure-only” driver on their older car models, not their new ones. Insurers would take into consideration an older car’s positives (e.g., less likely to be stolen) and set the premium price accordingly. And if your child goes off to college and doesn’t take the family car, you can remove him/her from your policy and reinstate him/her only when he/she comes home during vacations. Doing this could give you some significant insurance rate savings.
Generally speaking, industry pundits recommend adding your teenager to your policy because it’s cheaper. But if your teenager starts saving money to buy his/her own car, then you should help him/her find the most suitable insurance. Consult your insurance agent and ask about discounts that could help alleviate the financial pressure of owning car insurance for the first time. Some insurers offer discounts if a teenager has excellent academic grades or has completed a safety driving course.
Knowing when to add teens to auto insurance policy – and how – will help make this modern rite of passage easier and less heavy on the pocket. And it would help teach your young man or woman the responsibilities that come hand in hand with the pleasure of driving an automobile.