Insuring Your Kid’s Ride: What Parents Need To Consider

Most teens look forward to the day they’ll obtain their driver’s license and are able to drive their first car. For teenagers, the license signifies independence and the freedom to move about unsupervised.

For parents however, a teen’s license not only represents another stage of freedom but also an extra cost in the form of auto insurance.

When it comes to vehicle insurance, including your teen to your policy will undoubtedly increase your rates though the amount will depend on various factors. Fortunately, this guide will reveal the factors to consider when insuring your teen’s ride.

The Vehicle

Although most parents would love to surprise their teenage driver with a new car, practicality and financial considerations prevents many from doing so.

Bear in mind that the vehicle your teen drives has a huge impact on the insurance rate because insurers use the model, make, and the car’s year as the deciding factors. Therefore, brand new vehicles are more costly to insure and so are high-performance vehicles with considerable horsepower.

However, this doesn’t imply you should purchase a cheap old car for your teenager. You’ll discover that insurance companies offer discounts for contemporary safety features such as airbags and anti-lock brakes.

The ideal car should be three or four years old, in good working order, and should have as many safety features as possible. You’ll also need to establish whether the teen will have access to all the family vehicles or whether he or she will merely drive his or her own car.

This will help you establish whether to include the teen to your policy or create a new one. Whether you get a new or used car, you should do your due diligence as a parent.

Teen Discounts

When looking for auto insurance for new teen drivers, make sure you inquire about the various discounts the insurer may offer. Every company has a distinct line-up of discounts, so it’s important you check with different companies.

You’ll also discover that some insurance discounts are automatic, for instance when you raise your deductible or purchase a vehicle with an anti-theft device. However, you have to contact your agent or insurer to inquire about other discounts, for instance for good grades.

While discounts differ by state, you typically need at least a B average or better to meet eligibility. You’ll find that some insurers even offer discounts for enrolling in driver-safety programs, so establish what your kid should do in order to qualify.

Deductibles

The deductible is the amount you’ll have to pay from your pocket in case of a claim. You’ll discover that raising your collision and comprehensive deductibles will save you money on premiums. Furthermore, your teenager will think twice before he or she submits a claim for minor damage.

Consider raising the deductibles to at least $1,000 to avoid filing small claims and bear in mind that making numerous claims will increase future rates. Therefore, it’s advisable you pay out-of-pocket when it comes to minor incidents.

It’s also important you add more money to your emergency fund. This way, you’ll have the money to cover the deductible if any family member is involved in an accident.

The Insurer

One way to save money on your vehicle insurance is comparing prices. Don’t be content with a single quote from your family’s insurance agent because different insurers can be hundreds of dollars apart in terms of premiums.

Therefore, consider shopping around for companies that decrease premiums for each year of good driving. Compare the various insurers carefully because each has varied guidelines and you want to ensure you locate the one that’s most accepting of new teen drivers in your residential area.

It’s also important you investigate the insurers you’re considering and establish their insurance ranking from independent ratings.

Final Thoughts

Parents typically experience mixed emotions when the time comes for their teens to obtain their driver’s license. While they’re happy to see their kids mature into young adults, it can also be nerve-racking knowing that they’re driving on their own without parental guidance.

Furthermore, there are the extra insurance costs to consider. If you’re anxious about your teen’s auto insurance, this guide will reveal what to expect and how to lower your costs.

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