Anyone with a newly licensed or young driver in the household understands the importance of getting cheaper car insurance. Because young drivers don't have the experience or long-term driving record as older drivers do, insurance companies charge a premium for insuring them. Adding a new driver can be costly, but there are things both you and your young driver can do to get cheaper car insurance.
- Skill level:
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Add the young driver to the family policy. One of the benefits of adding a young driver to the family policy is that the full financial impact of adding an inexperienced driver on an automobile policy is diminished. The experiences of older more seasoned drivers help to offset the cost. It's cheaper to add the driver to the family policy than to write a stand-alone policy for the new driver.
Provide evidence of good grades, such as a transcript. Insurance companies offer substantial discounts on automobile policies for students who maintain good grades. Young drivers with an average grade of B or better will enjoy cheaper auto insurance premiums than students with mediocre grades.
Sign up the teen for a safe driver course. Insurance companies like to see their policyholders take safe driving courses. They show their appreciation with premium credits on the auto policy. Have the young driver (and experienced drivers too) take an insurance company-approved safe course. After completing the course, send a copy of the completion certificate to the insurance company to earn a premium discount.
Increase the physical damage deductibles. You can lower your insurance premiums by increasing your deductibles. Use this option with caution. New and inexperienced drivers are more prone to getting into automobile accidents than are seasoned drivers. By increasing the deductible you will lower the price on your car insurance premium but you potentially increase your out-of-pocket outlay if your young driver gets into several accidents.
Ask the insurance company about discounts. After you have added the young driver to the family automobile policy, have a chat with the insurance agent to find out if there are discounts that you were not previously aware of. Discounts such as being an AAA member or a member of the military may garner additional auto discounts. It doesn't hurt to ask your agent.
Combine insurance policies, such as your auto and homeowners insurance policies, with the same insurance company. While this may not directly lower the car insurance premium, the overall effect of placing two or more policies with the same insurance company is worth it. Doing so makes you eligible for a multi-line premium discount.
Tips and warnings
- Keep your young driver involved in the insurance process. Understanding how a newly licensed driver affects auto insurance premiums may encourage him to drive safely.
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