Fall 2018 Newsletter
For many teens, getting a driver's license is one of the most exciting times of their lives. For their parents, it can be a stressful - and expensive - experience. For that reason, we've put together this helpful guide to explain why car insurance rates for teens are so costly and what you can do to keep them as low as possible.
Why are teens so expensive to insure?
Put simply, car insurance for teen drivers is expensive because they get into more accidents than other age groups. That extra risk is reflected in the premium paid. We've found you can expect to pay between an extra $800 - $1,600 per year by adding a new driver to your policy and potentially more if you already have a number of tickets or accidents on your record.
How do I keep the rates as low as possible?
There are a number of strategies to keep your car insurance rates down when adding a teen driver.
1. Pick the right insurance company - insurance companies, like most businesses, generally have target markets. Some insurance companies offer better rates for youthful drivers than others. If your rate increases by $2,000 or more per year, you may want to get a quote comparison.
2. Make sure you're getting all the discounts - teens with a 3.0 GPA or better should qualify for the good student discount, which can save you hundreds per year. Several insurance companies also offer discounts for anti-theft and safety devices: things like car alarms, blind spot monitoring, lane departure assistance, and more.
3. Get a safe car - If your teen driver is also getting their own car, the vehicle you choose can make a big difference to your insurance premium. Safer cars generally cost less to insure. That's because safer cars result in smaller overall medical bills the insurance company must pay after accidents. If you've narrowed your search down to a couple cars, call us and get quotes for each one. Sometimes the difference in premium will help you decide on which car to buy.
4. Full coverage vs. Liability - liability insurance is required by MN law and protects other people. If you or your teen driver are at fault for an accident, your liability coverage pays for the damages to other people. Comprehensive and collision coverage pay to repair or replace your vehicle in that same at fault accident. These physical damage coverages are voluntary and foregoing them can reduce your premium by several hundred dollars per year. If you do decide to go without comprehensive and collision, just remember, you could be footing the bill for a new car if there's an accident.
5. Ask your teen to agree to safe driving behavior - while the premium increase for adding a teen driver can be shocking, it gets much worse if they actually have an accident or tickets on their driving record. Talk to your new driver about safe behaviors and ask them to agree to a few ground rules:
- No texting and driving. Always stay alert and focused behind the wheel.
- Drive defensively. Keep an eye on other drivers and expect the unexpected.
- Never drive under the influence of alcohol or other drugs.
While adding a new driver is always stressful for a parent, now you have an idea of what to expect, and some strategies to keep your insurance rates as low as possible.
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