Insuring The Teen Driver

If you're a parent, chances are you live in fear of the day your teenager starts driving. It isn't just that you'll have to worry about their driving skills, whether they're drinking, and who they're riding with. It isn't even just concern about all the other drivers on the road. It's the cost of insuring them.

First, it's important to understand that auto rates are based on the likelihood of a driver being involved in an accident. Statistics from the National Safety Council show that 16- and 17-year-old drivers are three times more likely than 25- and 26-year-olds to be involved in a fatal crash, while teenagers in general account for more than their fair share of auto accidents, largely because of inexperience behind the wheel. It is because of these numbers, and the risk attached to them, that insuring teenagers is so costly.
But, Girls are Cheaper, Right?

Conventional wisdom has always been that it's less expensive to insure teenage girls than teenage boys. This is still true to a point. While some experts claim that adding a girl to your policy will double your premium, and adding a boy will triple it, an equal number of insurers offer a slightly more palatable set of numbers: adding a boy will double your premium, while a girl will merely increase it by fifty percent. Whichever estimate is accurate, what you should know is that the gender gap is closing, mainly because more teenaged girls are driving than in previous generations.

It goes without saying that you should do some comparison shopping before you sign on the line that adds your teen driver to your existing policy. Your current insurance company may not be the best option when including a teen driver, or you might just want to increase your knowledge of options that are available. Some companies offer special libraries of brochures or tracking devices you can mount in your young person's car.

Whether you're insuring a boy or a girl, however, there are ways to mitigate the expense. Here are five tips to help you insure your teenager without destroying your financial future:
Sedans are Safer
When it comes to insurance premiums, a stable, conservative sedan, like a Honda Accord or Toyota Corolla or Camry, is your best bet. While your teen probably wants a sports car or an SUV, the first costs significantly more (up to $1000) to insure, and the second runs a risk of rolling over.
Airbags are your Friends
Just as conservative cars make insurance companies happier, so do cars with a full appointment of safety features. Airbags, automatic seat belts, and anti-lock brakes can all help get your premium discounted, as can equipping the car with LoJack or any other anti-theft device.
Grades Do Matter
If your teen is still in school - even college - their good grades can earn more than your good graces. Some insurance companies discount premiums by up to 15% for teenagers with good grades. For that matter, if your college student will be over 100 miles from home, not driving at school, and is under 21, there are special discounts just for that.
Be Class-y
While we're on the subject of grades, it is essential that your teen driver takes a driver education class, and it can help to take a defensive driving class as well. The latter may require your attendance in order to get the maximum discount, but some companies count it as "experience" behind the wheel. Even if there is no discount for the defensive driving course, it will help your teenager be more confident in sticky situations.
Consolidate your Policies
While one school of thought is that teen drivers are better off with their own policies, the reality is, consolidation is cheaper. While your premium will increase, the additional cost will still be about 15% less than what your teen would pay on their own, and there is nothing that says you can't require them to pay you for their share of the policy. (In fact, you should insist upon it.) Also, if you don't already have your auto and home insurance with the same insurance company, you should consider moving one or the other - there are discounts for that as well, and they get even deeper if you add a life insurance policy.

Insuring your teen driver is never going to be cheap, and other options, like raising your deductible, may just increase your financial risk should an accident happen. Choosing the right car and being certain that your young driver know how to handle it, however, are the two most important factors in keeping the policy premiums reasonable, and your son or daughter safe behind the wheel.