Teen Drivers: 10 Things You Must Know About Your First Car Insurance Policy
You’ve got your license and your first car, now it’s time to get your first car insurance policy. The problem is, car insurance for teen drivers is expensive and as you’re approaching it without a great deal of experience or knowledge behind you, it can also be confusing.
Find your best rate on Car Insurance!
Compare free personalized quotes from the nation's top providers.
To help you get the best auto insurance as a new driver, keep these ten top tips in mind.
1. You Will Pay More
It doesn’t matter how good of a driver you think you are or how much you try to convince them that you’ll be safe on the roads, as a teen driver and a new driver, you will pay more.
Auto insurance, like all forms of insurance, is about probabilities. A life insurance company sets your death benefit and insurance premiums based on the likelihood that you will die during the term. If there is a high likelihood, your premiums will increase your death benefit will decrease. It is a similar story with car insurance, only this time they’re measuring the probability of you making a claim.
The underwriters will look at your age, gender, job, and driving experience and then compare these to the national average to determine how likely you are to claim. They know, for instance, that inexperienced drivers are significantly more likely to be involved in an accident. They also know that the risk increases greatly for drivers under the age of 20.
Simply put, you will pay more because drivers your age and experience level cost the insurance company more.
2. Good Grades Can Help
An A or B average could net you a sizeable discount on your car insurance discounts. Known as good student discounts, these encouraged students to perform well and, in some cases, it can shave as much as 25% off your premiums.
Insurance providers differ with regards to what sort of discounts they provide and how big these discounts are, but if you have the grades and you shop around, you will find a good student discount.
3. Driver Education Can Help
Driver’s education courses can save you money on your auto insurance premiums. Defensive driving courses, in particular, could net you some sizeable discounts, as it proves that you’re committed to improving your driving habits and staying safe on the road.
Take a training course, prove you’re a safe driver, and reduce that “high-risk” tag and you could save a lot of money on your premiums.
4. Your Vehicle Can Make a Big Difference
A flash sports car will always cost more than a safe car fitted with a host of safety features and anti-theft features. The former is much more likely to be involved in fatal crashes and other costly incidents, which increases the risk and drives the costs high.
Think about what kind of car you’re driving. Not only can you save yourself a few grand by purchasing a cheaper, safer car, but you’ll also save a small fortune on your premiums.
5. You Can be Added to a Parent’s Policy
It may be much cheaper for you to be added to your parent’s policy than to get a policy of your own. Your parents’ policy premiums will increase, but it will be a much cheaper option for the family than getting a brand-new policy.
Make sure you get quotes for your own policy and a separate policy, seeing which one is cheapest.
6. College Could Save You
If you leave your car at home when you go to college and you spend most of your time on campus, you can get discounts on your premiums. If your policy is combined with your parents’ policy, they can claim you as an occasional driver or a resident student and pay much less to have you on their policy.
7. You Can Reduce your Premiums with Custom Insurance
Usage-based car insurance allows you to tweak your policy based on how often you drive, where you drive, and more. You can, for instance, allow the car insurance company to place a device in your car that will track how many miles you drive, how often you drive, and whether you’re a safe driver or not.
If you’re driving very little and very safely, you can ask this to be taken into consideration in reducing the cost of your auto insurance policy.
8. Keep Your Driving Record Clean
As soon as you have a learner’s permit, then you have a driving record, and the onus is on you to keep that record clean. One of the best driver discounts you can secure in the future concerns your driving record. The worse this is, the higher your premiums will be, and if you have any issues with distracted driving, DWIs, and general bad driving behavior, those car insurance premiums can skyrocket.
9. You Can Change Your Deductibles
You can tweak your deductibles to reduce your premiums. The higher the deductible, the less the premiums, as that takes some of the responsibility away from the car insurance provider.
It’s very risky to make these deductibles too high, as that could leave you in a spot of trouble if you’re ever involved in a motor vehicle accident. But if you have a cheap car that’s one fender bender away from being written off, it might be worth considering changing those deductibles.
10. You Don’t Have to Claim
The rising costs of car insurance rates and the fear of being stuck with these rates causes many drivers to deal with accidents on their own. The drivers may agree to avoid insurance costs by paying for minor car accidents out of their own pockets.
Obviously, this is not recommended if there are any expensive costs involved and the other driver is under no obligation to agree, but if the issue is minor, such as a little scratch or ding, it could be the best and the cheapest option.
Bottom Line: Education is Key
Whether you’re a 16-year-old borrowing a family car or a 20-something buying a brand-new car, this can be both an exciting and daunting time. It’s important not to rush in; don’t get too excited and accept the first offer you receive.
Comparing auto insurance companies based on discounts and car insurance quotes could save you hundreds of dollars over the course of a year.