Having a new teen driver in your home can be exciting and it can also be worrisome. The worries are not only experienced by the parents, but because of a driver's lack of experience behind the wheel, that worry is shared by the insurance company- resulting in an increase in the cost of the auto insurance policy.
Why Do Teens Cost More?
Teen drivers without any experience driving a car pose a higher risk. On average, teens are more likely to be in an accident than experienced drivers. Teen drivers have the high risk combination of inexperience and being more prone to distractions and dangerous behavior behind the wheel.
From a car insurance standpoint, this increased risk means higher insurance costs. Over time and without auto insurance claims, the cost of insuring a younger driver can decrease. But, without the personal experience to factor, you may need to look at different options to make the insurance more affordable.
How To Lower A Teen's Insurance Cost
Insurance companies look at a number of factors when developing what premium to charge. For young drivers, not only to help with insurance costs, but to teach safe and responsible driving, enroll your teen in Driver Education classes. With appropriate proof of completion, your teen could be eligible for discounts with insurance companies. Completing the state's 6h Defensive Driving program (provided your young driver is the main operator of the car) allows for another discount. Some companies offer a Good Student Discount for GPAs of 3.0 and greater.
Who Owns the Car?
When insuring a vehicle, the owner should maintain the policy for it. If the teen owns the car, the policy should be in the teen's name and the cost of that auto insurance will likely be significantly higher. If a parent owns the car, and the teen drives it, it could be more cost effective to have the policy in the parents' name and list the teen as a driver. However, if the insurance is in someone other than the teen's name — that person as the policy Named Insured is ultimately responsible for paying the premium. In any scenario, any licensed household member, regardless of who it is, should be listed on the insurance policy. In both scenarios, the risk associated with a teen driver is still present, and the insurance premium will reflect that increased exposure. In the example of the parent owning the vehicle, however, the parents driving and insurance record along with any additional discounts they are eligible for could play a factor.
Teen Drivers Need Coverage
No matter who owns the vehicle, every teen driver needs an adequate auto insurance policy. It is important for all licensed drivers to have adequate car insurance, even if they do not own a vehicle. Your Ten Eyck Group agent is happy to help you determine which decision is best for you and your family.