By Catherine Powell
|Image courtesy pxhere|
If there's one thing that puts the fear of God into every parent, it's the day their son or daughter asks to borrow the keys to the car. Especially in this day and age when the cost to insure a teenage driver can more than double your insurance premiums, I thought I'd take the time to teach you how to make those payments a bit more affordable. Just as there are ways for any driver to reduce the cost of auto insurance, there are a number of things you and your child can do to keep costs down. Below is my top-10 list.
#1: Pick the right car when it comes to insuring teens. - If you're like most families, chances are you have two or more vehicles that you currently insure. One may be more valuable than the others. When it comes to insurance, the value of a vehicle is one of the most important factors in assessing the cost of a policy. Therefore, if you have a minivan or compact car and an expensive SUV or luxury car, opt to have your child insured under the least expensive vehicle if you want to save money. Besides, do you really want to trust an inexperienced driver with a high performance automobile?
#2: Find out if your insurer offers any discounts. - Believe it or not, some insurance companies offer discounts to teens who have either taken and passed a defensive driving course or are on the honor roll at school. Some insurers even offer discounts based on the safety features present in any vehicle your teenager is authorized to drive. Call your insurance agent to find out which discounts apply to your policy.
#3: Opt-in for monitored driving via telematics. - In this wired world it should come as no surprise that technology has evolved to the point where individual driving habits can be monitored remotely. Many insurance companies offer a device that plugs into any vehicle that automatically tracks everything from acceleration and braking to speed and miles driven. Better yet, the data gleaned from this device not only generates a report that lets you and your insurer see at a glance the driving habits practiced by your teen driver, but it can also allow your teen to qualify for a discount on their insurance premiums. To find out if your insurance company participates in this kind of program, tell your agent that you'd like to learn more about telematics.
#4: Comparison Shop - Just as you should routinely ask your agent to shop your auto policy to see which companies offer the best rates, this tactic makes even more sense when it's time to insure your teen. Most parents automatically assume that they'll simply add their teen onto their existing policy. The fact is in some cases it might prove more economical to take out a separate policy on your teen rather than adding them to your own policy.
#5: Raise your deductible. - Insurance companies reward policyholders who are willing to shoulder more of the risk involved in insuring an automobile. That's why all insurers will reduce your premiums if you increase your deductible. This is especially applicable in the case of teenage drivers. That being said, before you raise your deductible, make sure it's to a level you are comfortable with paying since teenage drivers are more prone to being involved in auto accidents and getting traffic citations.
#6: Consider bundling your policies. - If you want to lower the cost of your auto insurance and your homeowner's insurance at the same time and you currently carry them under different insurers, consider bundling your policies with one insurer to save money across the board.
#7: Educate your teenage driver. - Before you turn over your car keys to a teenager, take the time to explain the responsibilities and consequences involved in operating a motor vehicle. Make sure your child understands what will happen should they get a ticket or be involved in an accident. Set some rules that show what is acceptable and unacceptable behavior behind the wheel. Show them some YouTube videos of auto accidents caused by teenagers who were texting while driving or who failed to wear their seat belts. Inform them what will happen if they abuse the privilege of driving.
#8: Consider adding an umbrella policy. - While this won't necessarily reduce your upfront cost, it could save you a bundle should your child be involved in an accident. Umbrella policies can provide extra liability coverage kicks in once an existing policy exceeds its limits. It doesn't matter if your teen is driving a junker. If he or she causes an accident with a luxury automobile, you could be on the hook for damages. Since a $1 million umbrella policy only costs a hundred dollars or so per year, this could save you thousands if your teen is ever involved in an accident.
#9: Consider delaying your child from driving for a year or so. - While this may not be the most popular choice, it can most definitely save you money if your teenager waits a bit longer to get their driver's license. The reason that insuring a teen is so expensive has to do with the statistics. Did you know that half of all teens are involved in a motor vehicle accident before they graduate high school? That's right, teen drivers are four times more likely to be involved in a motor vehicle accident than drivers aged 20. The accident rate is 150% higher for a 16-year-old as opposed to an 18-year-old.
#10: Choose the right insurance agent. - While anybody these days can point and click their way to an insurance quote, surfing the web to get your teenager an auto policy may not be your best bet. That's because online databases can't factor in all the variables mentioned above into the transaction. Plus, you may find it helpful to talk to a flesh and blood agent when you need to discuss the finer points of insuring your child. Independent insurance agents not only have access to many insurers, they also have the experience and knowledge that allows them to consider all the options and discounts available before recommending an insurer.
Catherine Powell is the owner of A Plus All Florida Insurance in Orange Park, Florida. To find out more about saving money on all your insurance needs, check out her website at http://aplusallfloridainsuranceinc.com